Only 464 head—four lots from Kansas—were offered in the weekly Fed Cattle Exchange Auction Wednesday. None sold, but two lots were passed out at $112/cwt.
Country trade remained undeveloped, although there were a handful of cash trades in Nebraska, but too few to trend. A few traded live at $112/cwt. and a few in the beef at $179.
After early follow-through pressure, especially for Feeder Cattle, Cattle futures firmed, closing mostly marginally higher.
Except for 25¢ and 27¢ lower in two contracts, Live Cattle futures closed an average of 10¢ higher.
Except for 12¢ lower in March, Feeder Cattle futures closed an average of 38¢ higher (5¢ to $1.02 higher).
Boxed beef cutout values were steady to firm on fairly good to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 24¢ higher Wednesday afternoon at $205.73/cwt. Select was 35¢ higher at $198.86.
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Major U.S. financial indices closed mixed Wednesday, supported by tech stocks and capped by trade war angst. Crude Oil futures (WTI-CME) were also sharply lower.
The Dow Jones Industrial average closed 45 points lower. The S&P 500 closed fractionally lower. The NASDAQ was up 4 points.
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Low commodity prices and worries about trade helped drive the Purdue University-CME Group Ag Economy Barometer 26 points lower in July to 117.
“This summer we’ve seen tariffs placed on imports of U.S. ag products by China and Mexico that are impacting producers’ bottom line,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “This month, we asked producers whether they expect to see their net income decline as a result of trade war conflicts. Over two-thirds of respondents indicated they expect to see lower income because of trade conflicts, with over 70% of them expecting a net income decline of 10% or more.”
Sharp declines were also recorded for the Index of Current Conditions, which fell from 138 to 99, and the Index of Future Expectations, which fell from 146 to 126 in July. The Ag Economy barometer is based on a monthly survey of 400 agricultural producers from across the country.
“Commodity prices dropped sharply in June and July, and there is real concern among producers that those prices will remain low and, possibly, fall even further,” Mintert says.
Approximately 4 out of 10 producers responding to the July survey believe it’s likely that near Dec corn futures will trade below $3.25/bu. and that near Nov soybean futures will trade below $8/bu., between mid-July and this fall.
“Prices in that range would result in a significant cash flow squeeze for many farm operators,” Mintert explains. “While prices at those levels would cover variable production expenses, it would leave some farmers falling far short of covering fixed and overhead expenses.”