Cattle Current Daily—Nov. 4, 2021

Cattle Current Daily—Nov. 4, 2021

Negotiated cash fed cattle trade ended up fully $2 higher in the Southern Plains on Tuesday at $128/cwt. on a live basis. That and rallying Cattle futures seem to have bolstered cattle feeder resolve to hold packers’ feet to the fire this week.

Through Wednesday afternoon, trade was limited on light demand in all major cattle feeding regions with too few transactions to trend, according to the Agricultural Marketing Service.

Live prices last week were at $124-$126/cwt. in the Texas Panhandle, at $126 in Kansas, $127 in Nebraska and at $126-$127 in the western Corn Belt. Dressed trade was at $200.

The stronger cash outlook and follow-through fundamental support helped Cattle futures take another step higher Wednesday.

Live Cattle futures closed an average of $1.01 higher (17¢ higher toward the back to $1.70 higher in spot Dec), amid heavy trade and expanding open interest.

Feeder Cattle futures closed an average of $1.35 higher (37¢ higher toward the back to $2.20 higher toward the front). They were helped along by Corn futures closing 8¢ to 9¢ lower through Jly ‘22. Corn futures were down on likely profit taking, harvest pressure and chatter about yields coming in at the top of range expectations.

Choice boxed beef cutout value was $1.11 higher Wednesday afternoon at $288.49/cwt. Select was $1.59 higher at $267.72/cwt.

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Major U.S. financial indices closed higher Wednesday, buoyed by comments from the Fed suggesting no plan to increase interest rates any time soon.

“In light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities,” according to the statement issued by the FOMC.

Addressing the press in making the statement, Federal Reserve Chair, Jerome Powell, explained, “Our decision today to begin tapering our assets purchases does not imply any direct signal regarding our interest rate policy. We continue to articulate a different and more stringent test for the economic conditions that would need to be met before raising the federal funds rate.”

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 161 points.

CME WTI Crude Oil futures closed $2.37 to $3.05 lower in the front six contracts, apparently pressured by news that the EU and Iran will resume nuclear pact talks, would could eventually lead to lifting restrictions on Iranian oil exports.

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Agricultural producer sentiment weakened in October, according to the Purdue University/CME Group Ag Economy Barometer. It declined 3 points to 121, marking the third consecutive month of declining sentiment.

“Recent weakness in farmer sentiment appears to be driven by a wide variety of issues, with concerns about input price rises topping the list,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Rapid run-ups in input prices, especially fertilizer for crop production, are giving rise to concerns among producers’ about their operating margins weakening. Livestock producers are also concerned about a cost-price squeeze, especially in the pork and dairy sectors.”

The Index of Current Conditions was down 5 points to 140, while the Index of Future Expectations fell 2 points to 114.

Rising input costs are also dampening expectations for farmland cash rental rates. In October, the percentage of corn and soybean producers expecting higher year-over-year farmland rental rates in 2022 dipped 7% from the previous month to 43%. Despite these concerns, producers remain bullish about farmland values. The Long-Term Farmland Value Expectations Index set a new record high in October at 161, which was 2 points higher than a month earlier. The short-term index rose 1 point to 156.

2021-11-03T20:48:30-06:00

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