Cash fed cattle trade wobbled out of the blocks on Tuesday with a decidedly lower tone, as expected. Although too few to trend, there were some early live sales in the Southern Plains at $117-$118/cwt. and a few dressed trades in the western Corn Belt at $188-$192. That’s about $3 lower on a live basis and $2-$3 lower in the beef for those regions.
Early two-side trading in Cattle futures gave way to the bears on Tuesday, amid light volume and uncertainty about how much lower cash fed cattle will trade this week.
Live Cattle futures closed an average of 55¢ lower across a broad range (12¢ to $1.32 lower). Near Jun and Aug closed below $100 at a contract low for Aug and within spitting distance of the low for Jun, which was established early on in March of last year.
Except for an average of 30¢ lower in the back two contracts, Feeder Cattle futures closed an average of $1.36 lower.
Wholesale beef value continued to tread water on Tuesday, with Choice boxed beef cutout value was 12¢ lower in the afternoon at $219.68/cwt. Select was $1.17 lower at $209.33.
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Major U.S. financial indices closed sharply higher on Tuesday, led by tech stocks, which were behind the previous day’s sharp decline; nothing new fundamentally except for perhaps being oversold.
The Dow Jones Industrial Average closed 389 points higher. The S&P 500 closed 32 points higher. The NASDAQ closed 71 points higher.
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Producer concern about trade issues helped pressure the Purdue University/CME Group Ag Economy Barometer five points lower to 135 last month. Both sub-indices that comprise the overall index were lower, too. The Index of Current Conditions fell 9 points in March to 134, while the Index of Future Expectations dropped by 4 points to 135.
Nearly half (47%) of respondents to the March survey said that a trade war negatively impacting agricultural exports was somewhat likely, compared with just 28% who thought it was unlikely. The remaining 25% indicated uncertainty with a neutral rating.
Producers also were asked about the likelihood of a U.S. withdrawal from the North American Free Trade Agreement (NAFTA). More than one-third expressed uncertainty, while 28% expected the U.S. to remain in NAFTA and 34% said they expect the U.S. to exit the agreement.
“Interestingly, when comparing results from the two trade questions, a larger share of respondents reported a significant decline in agricultural exports from a trade war was more likely than the U.S. withdrawing from NAFTA,” says James Mintert, director of Purdue University’s Center for Commercial Agriculture and principal investigator on the barometer project. “These results are important for two reasons. First, nearly half of producers rated the risk of a trade war as at least somewhat likely. Second, producers’ concerns about risks to agricultural trade are broader than just the ongoing NAFTA situation.”
The barometer and both sub-indices are based on a monthly survey of 400 U.S. agricultural producers.