Stronger recent wholesale beef values helped lift Cattle futures Tuesday.
Choice Boxed beef cutout value was $1.05 higher through Tuesday afternoon at $260.47/cwt. Select was 72¢ higher at $239.30/cwt.
Live Cattle futures closed an average of 79¢ higher (50¢ higher at the front to $1.37 higher at the back).
Feeder Cattle futures closed an average of 56¢ higher (30¢ at the back to $1.15 higher).
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were $140-$141/cwt. in the Southern Plains and $143-$145 in Nebraska and the western Corn Belt. Dressed prices were $228-$232.
The five-area direct weighted average steer price last week was $1.91 lower on a live basis at $142.88. The average steer price in the beef was $4.10 lower at $228.78.
Corn futures gained Tuesday, mostly 8¢ to 11¢, perhaps with some positioning ahead of next Monday’s Crop Production report which could include changes to expected yield.
Soybean futures faded with lower outside markets and weak Crude Oil futures. They closed mostly 19¢ to 21¢ lower through Aug ‘23 and then mostly 13¢ 14¢ lower.
Major U.S. financial indices weakened Tuesday amid more investor squeamishness over rising interest rates and the slowing global economy.
The Dow Jones Industrial Average closed 173 points lower. The S&P 500 closed 16 points lower. The NASDAQ was down 85 points.
West Texas Intermediate Crude Oil futures on the CME closed 1¢ to 37¢ higher through the front six contracts.
Agricultural producer sentiment increased in August, according to the Purdue University/CME Group Ag Economy Barometer. The overall producer sentiment index rose 14 points to a reading of 117. It was driven by increases in both the Index of Current Conditions, which rose 9 points to 118 and the Index of Future Expectations, which climbed 16 points to 116.
“Producers in the August survey were less worried about their farm’s financial situation than in July, although they remain concerned about a possible cost/price squeeze,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The Farm Financial Performance Index improved 11 points to a reading of 99, indicating more producers expect better financial performance for their farms this year and next. Corn and soybean prices rallied from their July lows into mid-August which, along with expectations for good yields, helped explain some of the improved outlook.
At the same time, producer uncertainty continues regarding the future cost of items purchased both for operations and family usage. When asked about their biggest concerns for the next year, more than half (53%) of respondents chose higher input costs, followed by rising interest rates (14%), input availability (12%), and lower output prices (11%).
Approximately four out of 10 producers expect crop input prices in 2023 to be either unchanged or possibly decline by as much as 10%, compared to 2022. On the other hand, just over half of all producers expect input prices to rise from 1 to 20%.
In August, 9% of respondents said they have engaged in discussions with companies offering payments for carbon capture — the highest percentage of respondents since the question was first included in the survey. Of those who engaged in discussions, 75% said the payment rate per metric ton of carbon offered was less than $20 and just 1% said they have signed a carbon contract. Respondents who engaged in discussions and chose not to sign a contract were asked the minimum payment per acre they would accept to enroll their farm in a carbon capture program. Two-thirds of those respondents said the payment rate needed to be at least $30 per acre, suggesting that payment rates need to rise to encourage more participation in carbon capture programs.
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 August 15-19, after USDA released both the August Crop Production report and World Agricultural Supply and Demand Estimates.