Declining open interest, negative outside markets, technical selling and weaker cash fed cattle prices pressured Cattle futures sharply lower for a second consecutive session Wednesday.
Feeder Cattle futures closed an average of $2.21 lower ($3.75 to $4.08 lower).
Live Cattle futures closed an average of $1.04 lower (60¢ to $1.40 lower).
Negotiated cash fed cattle trade ranged from slow on light demand in Nebraska to limited on light demand on other regions through Wednesday afternoon, according to the Agricultural Marketing Service.
So far this week, live prices are $1 lower in the Southern Plains at $172/cwt., $2 lower in Nebraska at $176 and $2-$8 lower in the western Corn Belt at $172-$178. Dressed prices are $2-$5 lower in Nebraska at $281.
Choice boxed beef cutout value was 15¢ lower at $309.09/cwt. Select was $1.54 lower at $287.12/cwt.
On the other side of the coin, grain and Soybean futures plowed higher Wednesday, led by Wheat and fueled by news of an attempted assassination of Russia’s Putin and what that could mean to the Black Sea Initiative.
Corn futures closed mostly 5¢ to 10¢ higher.
KC HRW Wheat closed 25¢ to 56¢ higher.
Soybean futures closed 5¢ to 8¢ higher through Jan’24. And then mostly 7¢ to 12¢ higher.
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Major U.S. financial indices closed lower again on Wednesday with follow-through uncertainty about the health of regional banks, compounded by the Fed’s decision to raise interest rates another 25 basis points.
The Dow Jones Industrial Average closed 270 points lower. The S&P 500 closed 28 points lower. The NASDAQ was down 55 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.52 to $3.06 lower through the front six contracts.
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U.S. agricultural producer sentiment improved modestly in April as measured by the Purdue University/CME Group Ag Economy Barometer. Month to month, it rose 6 points to a reading of 123. Both of the barometer’s sub-indices also increased in April. The Current Conditions Index was up 3 points to 129 and the Future Expectations Index was up 7 points to 120. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between April 10-14.
“Producers held a more optimistic view of the agricultural economy in April,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “A shift in farmers’ expectations regarding the Fed’s future interest rate policy could be a key reason.”
In April, 34% of respondents said they expect the U.S. prime interest rate to remain unchanged or decline over the next year, compared to 25% of producers who felt that way in February. At the same time, two-thirds (66%) of producers expect interest rates to keep rising, compared to 75% of respondents who felt that way in February. However, the biggest shift was a decline in the percentage of respondents who expect rates to rise between 1% to 2% in the next year, down 6 points since February to 37%.
Producers’ expectations for short-term farmland values increased in April following five-straight months of decline. The Short-Term Farmland Value Expectations Index rose 10 points in April to a reading of 123, while the long-term farmland index held steady at a reading of 142. Even with this month’s rise, the short-term index remains 21 points lower than a year earlier and 36 points lower than two years ago.