Feeder Cattle futures closed an average of 64¢ lower Tuesday, pressured by higher Corn futures.
Live Cattle futures closed narrowly mixed, from an average of 24¢ lower to an average of 17¢ higher, supported by wholesale beef prices showing signs of reaching the seasonal bottom.
Choice Boxed beef cutout value was $2.10 higher Tuesday afternoon at $248.04/cwt. Select was 60¢ higher at $221.91/cwt.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service.
Live prices last week were $143/cwt. in the Southern Plains and $145 in Nebraska and the western Corn Belt. Dressed prices were at $228.
Corn futures closed 2¢ to 4¢ higher, helped along by the export-positive decline in the Dollar.
Soybean futures closed mostly 11¢ to 16¢ higher with support from the rally in Crude Oil futures.
Major U.S. financial indices continued to rally for a second consecutive session Tuesday. Although the weaker Dollar and lower bond yields were supportive, there’s no making sense of investors’ collective day-to-day whims.
The Dow Jones Industrial Average closed 825 points higher. The S&P 500 closed 112 points higher. The NASDAQ was up 360 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.66 to $2.89 higher though the first six contracts.
Agricultural producer sentiment declined from August to September, according to the latest Purdue University/CME Group Ag Economy Barometer. It declined 5 points to a reading of 112 in September, driven mostly by producers’ weakened perception of current conditions. The Current Conditions Index declined 9 points to 109. However, the Index of Future Expectations also weakened, declining 3 points from a month earlier to a reading of 113.
“Concerns about input costs and, in some cases, availability are key factors behind the relative weakness in this month’s sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, a growing number of producers are also concerned about the impact of rising interest rates on their farm operations.”
Higher input costs remain the primary concern. In September, 44% of respondents chose “higher input costs” as their number one concern, while 23% chose “rising interest rates,” and 14% chose “availability of inputs.”
When asked to look ahead to 2023, the largest share (38%) of respondents expect input prices to rise from 1% to 9%, compared to 2022 prices. Nearly a fourth (24%) of producers expect input prices to rise from 10% to 19%; and 9% of survey respondents said they expect an input price rise of 20% or more.
The Farm Capital Investment Index declined to a record low of 31 in September, as producers continue to indicate now is not a good time to make large investments in their operations. Among respondents indicating now is a bad time to make large investment, 46% said increasing prices for farm machinery and new construction was the reason. As well, 21% indicated that rising interest rates were a primary reason, up from 14% in August.
Producers’ perspective on farmland values continues to soften. The Short-Term Farmland Value Expectations Index fell 5 points to 123. The Long-Term Farmland Value Expectations Index fell 7 points to 139. Compared to a year ago, the short-term index is down 21%, while the long-term index is 12% lower.
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 September 19-23.