Cattle Current Daily—Jan. 6, 2023

Cattle Current Daily—Jan. 6, 2023

Negotiated cash fed cattle trade was light on light to moderate demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. Early live sales were steady with last week at $157/cwt.

Elsewhere, trade was limited on light demand with too few transactions to trend.

Last week, live prices were $158 in Nebraska and $157-$160 in the western Corn Belt. Dressed prices were $250-$252.

Cattle futures traders took a breather Thursday, and likely some profits, following the strong session a day earlier and awaiting more cash direction.

Feeder Cattle futures closed an average of 96¢ lower, from 65¢ lower at the back to $1.67 lower toward the front.

Live Cattle futures closed an average of 36¢ lower, except for 7¢ higher in spot Feb.

Nearby grain and Soybean futures continued to drift lower.

Corn futures closed mostly 1¢ to 4¢ lower.

Soybean futures closed mostly 12¢ lower through Aug ‘23 and then 7¢ to 9¢ lower.

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Major U.S. financial indices closed lower Thursday, with much of the pressure attributed to stronger employment numbers than expected and the notion that leaves the Fed no quarter to ease up on interest rates.

Private sector employment increased by 235,000 jobs in December and annual pay was up 7.3% year-over-year, according to the December ADP® National Employment ReportTM produced by the ADP Research Institute® in collaboration with the Stanford Digital Economy Lab.

“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” says Nela Richardson, ADP chief economist. “Business segments that hired aggressively in the first half of 2022 have slowed hiring, and in some cases cut jobs in the last month of the year.”

The Dow Jones Industrial Average closed 339 points lower. The S&P 500 closed 44 points lower. The NASDAQ was down 153 points.

West Texas Intermediate Crude Oil futures (CME) closed 77¢ to 83¢ higher through the front six contracts. 

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Competition from both inside and outside of the industry suggest land values will remain strong this year, according to Farmers National Company (FNC), a leading landowner services provider.

“What we are seeing is a true supply/demand scenario. There are simply more buyers willing to bid on the limited amount of land coming to the market,” says Paul Schadegg, FNC Senior Vice President of Real Estate Operations. “Current commodity markets and strong cash rents provide buyers with the necessary returns to meet their investment criteria while giving them the opportunity to expand operations or add land to their investment portfolio. Our anticipation is that these values will remain strong coming into the new year with continued strength in the ag economy although we may see less and less of the record sales.”

Traditional local farmer-operators are successful buyers of farmland 75% of the time, but with plenty of active bidding from land investors, according to FNC.

“While the investor may not always be the buyer of land, they are part of the competition driving the values higher,” Schadegg says. “We also expect this trend to continue as many investors see the long-term value of farmland, the opportunity to diversify investments and the value of land as a hedge against rising inflation.”

However, Schadegg also points to escalating inflation and interest rates as caution signs.

“These factors have the impact to decrease net farm income, erode operator equity and subsequently pressure farmland value,” Schadegg explains. “So, we sit at a somewhat precarious point in time where opportunity exists for both land sellers and buyers but is dependent on the continued strength of the agriculture economy to stabilize or grow.”

Farmers National Company manages more than 5,000 farms and ranches in 30 states comprising more than 2 million acres.

2023-01-05T18:21:39-06:00

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