Negotiated cash fed cattle trade was slow to moderate on moderate demand in Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service. Dressed trade in Nebraska was $2 lower at $220/cwt. Although too few to trend, there were some early live sales at $138, compared to $140 last week.
There were some early live sales in the western Corn Belt steady at $140 and a few in the beef steady to $2 lower at $220, but too few of either to trend.
Trade in the Southern Plains was limited on light demand. A light test sold steady on a live basis at $138.
Cattle futures closed mixed Wednesday, supported by moderating grain futures price gains but pressured by the weaker cash outlook.
Live Cattle futures closed an average of 41¢ lower, except for an average of 32¢ higher in two contracts.
Feeder Cattle futures closed an average 32¢ higher, except for unchanged to an average of 36¢ lower in the front three contracts.
Choice boxed beef cutout value was 11¢ higher Wednesday afternoon at $266.93/cwt. Select was 38¢ higher at $259.61/cwt.
Soybean futures closed 4¢ to 6¢ higher through Aug ‘23 and then 2¢ to 3¢ higher.
Corn futures closed 4¢ to 7¢ lower through the front four contracts and then mostly 1¢ lower.
Major U.S. financial indices closed sharply lower Wednesday, apparently fueled by the Fed’s most recent minutes suggesting stimulus tapering could accelerate and rate hikes could be coming sooner than anticipated. Queasiness relates to whether the Fed will begin reducing its balance sheet — taking liquidity from the market — once the bond buying program ends.
Positive news on the day included the closely-watched ADP®National Employment™report coming in significantly stronger than the trade expected with 807,000 private sector jobs added from November to December.
“December’s job market strengthened as the fallout from the Delta variant faded and Omicron’s impact had yet to be seen,” says Nela Richardson, ADP chief economist. “Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth. December’s job growth brought the fourth quarter average to 625,000, surpassing the 514,000 average for the year. While job gains eclipsed 6 million in 2021, private sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels.”
The Dow Jones Industrial Average closed 392 points lower. The S&P 500 closed 92 points lower. The NASDAQ was down 522 points.
Agricultural producer sentiment grew more positive last month, according to the Purdue University/CME Group Ag Economy Barometer. It climbed 9 points month to month in December to 125, only the second increase since last May.
The Index of Current Conditions and the Index of Future Expectations also increased with stronger current conditions responsible for the barometer’s rise. December’s Index of Current Conditions rose 18 points to a reading of 146, while the Index of Future Expectations rose 4 points to a reading of 114.
“Excellent crop yields this fall combined with strong crop prices provided many producers with their most positive cash flow in recent years. That combination helps explain the year-end rise in the financial index as well as the barometer overall,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
December marked the second consecutive month that producers reported stronger financial performance for their operations. The Farm Financial Performance Index rose 7 points to 113 in December, which is the index’s highest reading since May and 21% higher than readings obtained just before the pandemic’s onset.
Agricultural producers expressed concern about rising production costs and the availability of production inputs. When asked about the biggest concerns for their operation in the upcoming year, 47% of respondents selected higher input cost from a list that included lower crop and/or livestock prices, environmental policy, farm policy, climate policy and COVID’s impact. More than half (57%) of producers said they expect farm input prices in the upcoming year to rise by more than 20% compared to a year earlier. Nearly four out of 10 respondents said they expect input prices to rise by more than 30%.
Producers were also asked if they’ve had any difficulty purchasing crop inputs from their suppliers for the 2022 season. Nearly four out of 10 (39%) said they’ve experienced some difficulties. In a follow-up question, producers who indicated they were experiencing difficulties in making purchases were asked which crop inputs they’ve had trouble purchasing. Responses were varied, which could be an indication of problems across the supply chain, and included difficulties in purchasing fertilizer (31%), herbicides (28%), farm machinery parts (24%) and insecticides (17%).
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. The latest survey was conducted December 8-14, 2021.