Daily Market Highlights

Cattle futures burst higher on Tuesday, supported by higher outside markets, what some would call obscenely oversold conditions and likely short covering. There was also chatter about support coming from news that Brazil halted beef exports to China after confirming a case of atypical BSE. The ball will likely be in China’s hands because it seem doubtful the discovery will change Brazil’s OIE BSE risk status.

The rally came despite negotiated cash fed cattle sales opening in the Southern Plains a day earlier at $113/cwt., which was $2 less than the previous week.

Live Cattle futures closed an average of $1.35 higher (77¢ to $1.70 higher).

Feeder Cattle futures closed an average of $3.42 higher.

Wholesale beef values were steady to firm on moderate to fairly good demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 20¢ lower Tuesday afternoon at $223.00/cwt. Select was 34¢ higher at $207.21.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 3¢ to 4¢ higher. 

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Major U.S. financial indices closed sharply higher Tuesday with hints that the Fed is willing to cut interest rates in an effort to sustain economic growth. At least that’s what the trade seemed to interpret from opening remarks made by Federal Reserve Chair, Jerome Powell at the Conference on Monetary Policy Strategy, Tools, and Communications Practices:

“I’d like first to say a word about recent developments involving trade negotiations and other matters,” Powell said. “We do not know how or when these issues will be resolved. We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”

The Dow Jones Industrial Average closed 512 points higher. The S&P 500 closed 58 points higher. The NASDAQ was up 194 points.

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The Purdue University/CME Group Ag Economy Barometer—a measure of producer sentiment—dropped 14 points in May to 101, the lowest level since October 2016.

“Ag producers are telling us the agricultural economy weakened considerably this spring as the barometer has fallen 42 points (29%) since the start of this year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Farmers are facing tough decisions in the midst of a wet planting season and a lot of uncertainty surrounding trade discussions.”

Month to month, producer perspectives weakened considerably, relative to both current and future economic conditions. The Index of Current Conditions declined 15 points to 84. The Index of Future Expectations also declined 15 points to 108.

Unsurprisingly, producers continue to be concerned about agricultural trade issues. For instance, only 65% of respondents expect U.S. agriculture to see a favorable outcome to the U.S.-China trade dispute. That’s down from 77% in March and 71% in April.

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The political football that was the supplementary disaster aid bill finally made it through the uprights Monday night. If signed by President Trump, as expected, it will start the ball rolling on $19.1 billion in aid for natural disasters going back a few years.

According to a statement from Iowa Secretary of Agriculture, Mike Naig, these are some of the highlights:

Approximately $3 billion is provided to the USDA Office of the Secretary to cover producers’ agricultural losses due to natural disasters.

$435 million will be provided to the Emergency Watershed Protection Program (EWPP) for rural watershed recovery.  

$558 million will be provided to the Emergency Conservation Program (ECP) for repairs to damaged farm land.   

$150 million will be allocated to repair Rural Development Community Facilities in towns affected by natural disasters. 

Cattle futures tried for gains early once again Monday, but succumbed to sluggish trade and overall bearishness by the close.

Live Cattle futures closed an average of 55¢ lower (10¢ lower to $1.70 lower in spot Jun).

Feeder Cattle futures closed an average of $1.05 lower, except for an average of 15¢ higher in three contracts.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 1¢ lower Monday afternoon at $223.20/cwt. Select was 82¢ lower at $206.87.

Corn futures closed 2¢ lower in the front months, but mostly 1¢ to 2¢ higher overall.

Soybean futures closed mostly 1¢ to 3¢ higher. 

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Major U.S. financial indices closed mixed on Monday. Much of the pressure was on tech companies, fueled by reports that the U.S. Department of Justice plans to investigate some of the giants, relative to potential antitrust practices.

The Dow Jones Industrial Average closed 4 points higher. The S&P 500 closed 7 points lower. The NASDAQ was down 120 points.

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Crop planting and development continued to lose ground last week, according to the most recent Crop Progress report.

67% of corn was planted as of June 2, which was 29% less than last year and the 5-year average. 46% is emerged, which is 38% less than last year and the average. Progress lost more ground week to week in some key states, compared to average: Illinois (-59%); Indiana (-62%); Iowa (-33%); Minnesota (-39%); Nebraska (-11%).

39% of soybeans are in the ground, compared to 86% for the previous year and 79% for the average. 19% are emerged, which was 46% less than last year and 37% less than average.

Pasture and range conditions continue at a stellar pace, though eroding conditions are showing up in parts of the Southeast.

67% of the nation’s pasture and range is rated in Good (54%) or Excellent (13%) condition, compared to 50% last year. 7% is rated as Poor (6%) or Very Poor (1%), compared to 18% a year earlier. States with 15% or more rated as Poor or Very Poor include: FL (19%); GA (28%); ME (18%); NM (37%), OH (16%); SC (19%); WI (16%).

Negotiated cash fed cattle trade ended the week mainly steady with the previous week on a live basis at $115 in the Southern Plains, $116 in Nebraska and mostly $116-$117 in the western Corn Belt. Dressed trade was steady to $3 higher at $186 in Nebraska and at $185-$187 in the western Corn Belt.

Live Cattle futures tried to firm early in Friday’s session but gave way to further losses as sharp follow-through pressure continued in Feeder Cattle, despite sharply lower Corn futures on the day.

Added pressure on commodities came from news that President Trump plans to impose 5% tariffs on Mexican imports, beginning June 10, unless that country makes significant progress toward stemming the flow of illegal immigrants across its northern border into the U.S. Should that come to pass, the move also casts a shadow over ratification of the U.S.-Mexico-Canada trade agreement.

Live Cattle futures closed an average of $1.47 lower. That’s an average of $3.79 lower in the previous two sessions.

Feeder Cattle futures closed an average of $3.52 lower ($1.77 lower to $5.10 lower in spot Aug), in the heaviest trade volume since early April. That made for an average of $7.62 lower in the last two session.

Wholesale beef values were weak to lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 37¢ lower Friday afternoon at $223.21/cwt. Select was $1.18 lower at $207.69.

Corn futures on Thursday closed 4¢ to 9¢ lower, presumably on profit taking, month-end position squaring and worries about tariffs on Mexico.

Soybean futures closed 9¢ to 11¢ lower. 

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Major U.S. financial indices dove lower Friday on the aforementioned threat of U.S. tariffs on Mexican imports.

Crude oil futures (WTI-CME) closed another $2.98 to $3.10 lower through the front six contracts. That’s $5.11 to $5.32 lower in the last two sessions.

The Dow Jones Industrial Average closed 354 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 114 points.

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African Swine Fever (ASF) continues to spread geographically and numerically.

According to analysts with CoBank’s Knowledge Exchange Division, it has already caused the loss of hundreds of millions of pigs across China and Southeast Asia, creating a massive shortfall in animal protein supply for those regions through 2020, and possibly for years to come. They add that the shortfall will have significant implications for the U.S. animal protein and feed sectors.”

Assuming the U.S. remains free of AFS, it stands to gain via more exports of pork and other animal proteins.

“The U.S. continues to remain a low-cost exporter of protein products and is in strong position to be a major beneficiary as China and other Asian markets ramp up their imports,” says Will Sawyer, CoBank lead economist for animal protein. “But if the trade dispute with China remains unresolved, the upside trade potential for the U.S. meat sectors may not be fully realized.”

At the same time, the U.S. looks to continue losing feed grain exports. The reduction of feed demand due to ASF will be especially painful for elevators, crushers, and feed mills focused on Chinese markets, according to CoBank.

In a new report from CoBank, African Swine Fever Implications for U.S. Ag, analysts project a 30% decline in the Chinese hog herd for 2019-20, compared to 2017-18, would reduce soybean meal consumption by 9 million metric tons (mmt) and corn consumption by 28 mmt.

Reduced feed grain demand will likely linger as China begins to rebuild its herd.

As of May 23, the World Organization for Animal Health (OIE) AFS situation report indicated a total of 3,835 ongoing outbreaks and 2,607 new outbreaks. For perspective, the previous report (Apr. 26-May 9) indicated 1,322 ongoing outbreaks and 157 new ones. Countries and territories reporting on new or ongoing ASF outbreaks included: Europe (Belgium, Hungary, Latvia, Poland, Romania, Russia and Ukraine); Asia (China, Hong Kong and Vietnam) and Africa (South Africa). 

In an effort to prevent a global ASF pandemic, OIE launched a global initiative for the control of ASF at its 87th General Session last week.

“Given the global socioeconomic repercussions of ASF, controlling the disease is a high priority for both affected countries and those free of the disease,” according to an OIE statement. “Although ASF poses no risk to human health, it is devastating for the economy of pig farms and for international trade, with repercussions for the livelihoods of farmers and for food safety.”

Cattle futures collapsed late in Thursday’s session with Feeder Cattle limit down in the front months and Live Cattle sharply lower.

Feeder Cattle futures closed an average of $4.10 lower.

No doubt, surging grain prices had plenty to do with the pressure in Feeder Cattle.

Corn futures on Thursday closed 11¢ to 17¢ higher through Jul ‘20 and then mostly 1¢ higher. Week to week, that’s an average of 41¢ higher through the front six contracts.

Soybean futures closed 16¢ to 17¢ higher through Mar ‘20 and then mostly 8¢ to 14¢ higher. Week to week, that’s an average of 66¢ higher through the front six contracts.

Other than spillover pressure, it was harder to explain the hard decline in Live Cattle, especially from a fundamental standpoint.

Live sales so far this week are mainly steady at $115/cwt. in the Southern Plains and at $116 in Nebraska. Though too few to trend, early dressed sales on Thursday were steady to $4 higher at $186-$187 in Nebraska and the western Corn Belt.

Wholesale beef values are higher, too. Week to week on Thursday, Choice boxed beef cutout value was $2.79 higher at $223.58/cwt. Select was $2.34 higher at $208.87.

But, Live Cattle futures closed an average of $2.32 lower.

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Major U.S. financial indices edged higher Thursday. Though worries about economic growth continue, the second estimate for first-quarter GDP growth of 3.1%, from the U.S. Bureau of Economic Analysis, provided some support.

Crude oil futures (WTI-CME) tumbled $2.13 to $2.22 lower through the front six contracts.

The Dow Jones Industrial Average closed 43 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 20 points.

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Slowing global economic growth is one factor behind expectations for reduced year-over-year U.S. agricultural exports, according to the most recent Outlook for U.S. Agricultural Trade, From USDA’s Economic Research Service (ERS).

“Per capita world GDP growth is expected to decrease from 2.1% in 2018 to 1.8% in 2019,” say ERS analysts. “Global trade tensions and the fading impact of fiscal stimulus in the United States, and monetary stimulus elsewhere, will lead to slowed growth for the remainder of 2019.”

Projected livestock, dairy and poultry exports were reduced $500 million to $29.9 billion.

Beef exports are forecast $300 million lower to $7.4 billion on softer prices and volumes. However, ERS analysts point out Australia’s weather-related struggles (lower exportable supplies) provide the U.S. opportunity to expand Asian market share.

“Overall, U.S. agricultural exports for fiscal year 2019 are projected at $137.0 billion, down $4.5 billion from the February forecast, due to reductions in grains, oilseeds, and livestock and products,” say ERS analysts. “Export forecasts for commodities published in the May 10 WASDE (grains, oilseeds, cotton, and livestock and products) include Chinese tariffs in place as of that date. The impact of additional retaliatory tariffs announced by China May 13 on exports of other commodities have been determined to be minimal for fiscal 2019.”

So far, signs point to at least steady prices for negotiated cash fed cattle trade this week.

Although there were too few transactions for a trend, early live sales were mainly steady on Wednesday at $115/cwt. in the Southern Plains and at $116 in Nebraska.

Early in the day, 137 head sold out of the 483 head offered in the weekly Fed Cattle Exchange auction. Two lots from Kansas sold for a weighted average price of $115/cwt.

The outlook for steady cash and recently stronger wholesale beef values helped Cattle futures recover some early ground, following early pressure.

Live Cattle futures closed an average of 44¢ higher, (7¢ to 80¢ higher). Perhaps traders are also starting to account for the higher production cost in the deferred contracts.

Feeder Cattle futures closed narrowly mixed, from an average of 26¢ lower to an average of 24¢ higher.

Wholesale beef values were steady on Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 24¢ higher Wednesday afternoon at $223.53/cwt. Select was 46¢ lower at $209.99.

Corn futures closed 1¢ to 2¢ lower through Jul ‘20 and then mostly 1¢ higher.

Soybean futures closed 10¢ to 16¢ higher through Aug ‘20 and then mostly 4¢ to 9¢ higher.

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Major U.S. financial indices closed lower again Wednesday, with continued pressure from declining bond yields and bank stocks, tied to signs of slowing economic growth here and abroad.

The Dow Jones Industrial Average closed 221 points lower. The S&P 500 closed 19 points lower. The NASDAQ was down 60 points.

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The Livestock Marketing Information Center (LMIC) projects second-quarter cattle prices to average slightly higher year over year: about 2% higher for fed cattle and 1% more for steer calves (500-600 lbs.) and feeders (700-800 lbs.).

That follows a first-quarter decline of 0.1% for fed steers (5-Area Direct). Basis the Southern Plains, feeder steer prices were 3.9% less (-$5.76/cwt.), while steer calves averaged 4.8% less (-$8.60/cwt.).

“U.S. cattle slaughter for the first quarter of 2019 was slightly above a year ago (up 0.7%), while tonnage produced was 0.8% below 2018’s,” say LMIC analysts, in the latest Livestock Monitor. “The year-over-year increase was due to larger heifer and cow (beef and dairy) harvests. Production declined because of lower dressed weights for steers, heifers, and cows.”

LMIC forecasts fed steer prices in the third quarter (July-September) to average $112-$115/ cwt., about 3% more year over year. Feeder steers are expected to be 3% to 4% below the previous year’s average of $155.99. Steer calf prices for the quarter are pegged flat to 1% higher.

In the fourth quarter, LMIC analysts say, “Compared to 2018, fed cattle prices may be higher (up 1% to 3%), 700-800-pound steers flat, and calves unchanged to 4% stronger.”

Surging grain futures prices helped pressure Feeder Cattle futures to start the week. That helped cap early support in Live Cattle. Lower outside markets, a sharp decline in Lean Hog futures and more cool, wet weather that could continue to dampen summer grilling demand also weighed.

Live Cattle futures closed narrowly mixed, from an average of 25¢ lower to an average of 21¢ higher.

Feeder Cattle futures closed an average of $1.17 lower.

Wholesale beef values were higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.65 higher Tuesday afternoon at $223.29/cwt. Select was $1.98 higher at $210.45.

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Grain futures closed sharply higher Tuesday, buoyed by ongoing planting and development delays, as illustrated in the most recent USDA Crop Progress report.

For instance, 58% of corn was planted as of May 26, which was 32% less than last year and 32% less than the 5-year average. 32% is emerged, which is 37% less than last year and 37% less than average.

Progress is even more bearish in some key states, compared to average: Planting is 60% behind average in Illinois; 63% behind in Indiana; 20% behind in Iowa; 27% off the pace in Minnesota and 13% less than average in Nebraska.

Likewise, 29% of soybeans are in the ground, compared to 74% for the previous year and 66% for the average. 11% are emerged, which was 33% less than last year and 24% less than average.

Progress is even more bearish in some key states, compared to average: Illinois (-60%);  Indiana (-63%); Iowa (-20%); Minnesota (-27%); Nebraska (-13%).

Corn futures closed mostly 17¢ higher through Jul ‘20 and then 2¢ to 6¢ higher.

Soybean futures closed 23¢ to 26¢ higher through Sep ‘20 and then mostly 17¢ to 22¢ higher.

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Major U.S. financial indices closed lower Tuesday, pressured by declining yield on the 10-year Treasury note and bank stocks.

The Dow Jones Industrial Average closed 237 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 29 points.

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“Both Live and Feeder cattle are likely due to a correction (technical) following the rapid move at the end of April and the stalling of that move in May. The recent Cattle on Feed report may be the catalyst to start the correction,” says Stephen Koontz, agricultural economist at Colorado State University, in the most recent issue of In the Cattle Markets. “Feedlots marketing aggressively and did not place as strongly as expected during April.”

Along with April placements being less than the trade anticipated, Koontz points out, “Cattle on feed over 90 days declined very slightly and cattle on feed over 120 days are down sharply—over 200,000 head. Cattle on feed over 120 days start to decline seasonally during May; this was seen, but more sharply than typical.”

By way of recap, negotiated cash fed cattle trade ended the week generally $1-$2 lower on a live basis at $114-$115/cwt. in the Southern Plains and $116 in Nebraska. It was steady in the western Corn Belt at $116-$118. Dressed trade was steady to $2 lower in Nebraska at $183-$186; steady to $4 lower in the western Corn Belt at $185-$186.

Limit-down Lean Hog futures, and perhaps defensive positioning ahead of the monthly Cattle on Feed report (see below), helped pressure Cattle futures on Friday. That report ended up more favorable than expected with fewer feedlot placements than anticipated.

Except for 37¢ higher in spot Jun, Live Cattle futures closed an average of 35¢ lower.

Except for 20¢ higher in spot Aug, Feeder Cattle futures closed an average of 45¢ lower.

Wholesale beef values were higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 85¢ higher Friday afternoon at $221.64/cwt. Select was $1.94 higher at $208.47.

Corn futures closed 7¢ to 14¢ higher through Jul ‘20 and then mostly 2¢ lower to 1¢ higher.

Soybean futures closed 6¢ to 8¢ higher through May ‘20 and then mostly 2¢ to 5¢ higher.

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Major U.S. financial indices stabilized Friday, but remained under pressure from trade worries and related signs of slowing economic growth.

The Dow Jones Industrial Average closed 95 points higher. The S&P 500 closed 3 points higher. The NASDAQ was up 8 points.

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If anything, markets ought to judge Friday’s monthly Cattle on Feed report as neutral to cautiously bullish, with significantly fewer April placements than most analysts expected.

There were 1.84 million head placed in feedlots (capacity of 1,000 head or more) in April, which was 8.67% more (+147,000 head) year over year. Most analyst expectations ahead of the report were for placements to be up 13% or so. In terms of weights, 19.27% weighed less than 600 lbs., 37.84% weighed 600-799 lbs. and 42.88% weighed 800 lbs. or more.

The 1.93 million head marketed in April were 6.93% more (+125,000 head) than the previous year, which was slightly more than pre-report projections.

Likewise, cattle on feed May 1 were slightly less than expected with 11.82 million head, which was 2.25% more (+260,000 head) than a year earlier. Still, that’s the most inventory for the date since the data series began in 1996, according to USDA’s Agricultural Marketing Service.

Negotiated cash fed cattle trade continued in Nebraska through Thursday afternoon at $116/cwt., which was $1 lower than last week, but steady to $1 higher than on Wednesday. Dressed sales were at $183-$186, which was steady to $2 lower than the previous week.

Cattle futures mostly edged higher Thursday, helped along by the previous day’s bullish Cold Storage report, oversold conditions and continued sluggishness.

Except for 2¢ lower in Feb, Live Cattle futures closed an average of 21¢ higher.

Except for 2¢ lower at the back of the board, Feeder Cattle futures closed an average of 21¢ higher.

Wholesale beef values were firm to higher on moderate to fairly good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.04 higher Thursday afternoon at $220.79/cwt. Select was 72¢ higher at $206.53.

Corn futures closed 2¢ to 5¢ lower through May ‘20 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed 7¢ lower in the front five contracts and then mostly fractionally lower to 3¢ lower.

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Major U.S. financial indices closed lower again Thursday, under continued pressure from uncertainty about domestic and global economic growth, related to the U.S. trade impasse with China.

Crude Oil futures (WTI-CME) fell an average of $3.47 through the front six contracts, closing at their lowest levels since March.

The Dow Jones Industrial Average closed 286 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 122 points.

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“The United States holds all the cards here, and if the U.S. is willing to walk away from the game board and kick it over, it won’t be the one feeling the pain,” said Peter Zeihan, a global trade expert and best-selling author, offering his perspective, at the U.S. Meat Export Federation (USMEF) spring conference, on how the current trade environment impacts U.S. agriculture and the red meat industry specifically.

“What you’re seeing right now with the trade deficit is a transitional period,” Zeihan explained. “In this moment, it looks like the United States doesn’t have as much leverage as it actually does. You feel that more than any other sector, because agriculture is the only thing that foreign governments can target. But this moment of transition isn’t going to last long.”

In the meantime, U.S. Secretary of Agriculture Sonny Perdue announced yesterday that President Trump directed him to craft a relief strategy to support American agricultural producers while the Administration continues to work on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.

Specifically, the President authorized USDA to provide up to $16 billion in programs, which is in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions.

“The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners,” says Secretary Perdue. “Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers. Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”

At the USMEF meeting, Zeihan pointed out, “The Greater Midwest is the single largest chunk of arable land in a temperate zone in the world, and it out-produces the next two largest agricultural zones put together. The Greater Mississippi, by itself, has more miles of naturally navigable waterway than the combined internal systems of the rest of the world. This chunk of North America is both the richest territory on the planet and the most securable. Decades of bipartisan effort have yet to screw this up, and this will not be the administration that cracks the code.”

Negotiated cash fed cattle trade was steady to $2 lower on a live basis through Wednesday afternoon at $115/cwt. in the Texas Panhandle and at $114-$115 in Kansas. Dressed sales in Nebraska were mainly steady with last week at $185-$186.

Only 309 head (three lots) were offered in the weekly Fed Cattle Exchange auction; none sold.

Cattle futures continued to leak lower amid sluggish trade.

Live Cattle futures closed an average of 36¢ lower.

Except for $1.07 higher in expiring May, Feeder Cattle futures closed an average of 24¢ lower.

Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 17¢ higher Wednesday afternoon at $219.75/cwt. Select was 77¢ lower at $205.81.

Corn futures closed mostly 1¢ to 2¢ higher toward the front of the board and then mostly fractionally higher.

Soybean futures closed 5¢ to 6¢ higher.

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Major U.S. financial indices closed lower Wednesday, pressured mostly by retail stocks and tech shares.

The Dow Jones Industrial Average closed 100 points lower. The S&P 500 closed 8 points lower. The NASDAQ was down 34 points.

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Total pounds of beef in freezers Apr. 30 totaled 430.35 million lbs. That was 5% less (-40.8 million lbs.) than the previous month and 9% less than the previous year, according to the monthly USDA Cold Storage report published Wednesday. That’s also well below the five-year average of 457 million lbs., according to Allendale, Inc.

Frozen pork supplies of 621.86 million lbs. were 2% more than the previous month but 2% less than a year earlier. 

Total red meat supplies in freezers of 1.099 billion lbs. were up slightly from the previous month but down 5% from last year.

Total frozen poultry supplies were up 2% from the previous month and up slightly from a year ago.

Sluggish trade and rising grain prices helped pressure Cattle futures Tuesday. Arguably, most of the pressure on the grain side comes from the uncertainty about ultimate planting reality and potential production, which makes it tough to project breakevens with much confidence.

Live Cattle futures closed an average of 34¢ lower.

Except for 22¢ higher in spot May, Feeder Cattle futures closed an average of $1.59 lower.

Wholesale beef values were lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.87 lower Tuesday afternoon at $219.58/cwt. Select was $1.45 lower at $206.58.

Corn futures closed 4¢ to 6¢ higher through Jul ’20, and then mostly 1¢ to 2¢ higher.

Soybean futures closed 8¢ to 10¢ lower through Nov ’20 and then 5¢ to 7¢ lower.

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Major U.S. financial indices closed higher Tuesday, apparently bolstered by reports that the U.S. would ease, temporarily, restrictions imposed a day earlier on China’s tech giant, Huawei. Those restrictions—including prohibiting U.S. chipmakers from selling to the company—stem from an ongoing legal dispute between the company and the U.S. revolving around allegations that the Chinese company stole U.S. trade secrets.

The Dow Jones Industrial Average closed 197 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 83 points.

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“Going forward, the (African Swine Fever) ASF-related impacts on the Chinese hog inventory are expected to lead to significant increases in demand for imported pork. A probable scenario is for Chinese excess demand for imported pork to progressively drive world pork trade dynamics. High Chinese pork prices can be expected to draw large volumes of imports from pork-exporting countries,” according to analysts with USDA’s Economic Research Service (ERS), in the most recent Livestock, Dairy and Poultry Outlook.

“For the United States, this could mean that significant shares of increased U.S. pork exports may back-fill pork diverted to China by other pork-exporting countries,” ERS analysts say. “However, to the extent that increased demand is reflected in higher prices, U.S. pork may find itself under competitive pressure in a number of price-sensitive markets. In addition, higher pork prices may also affect exports to countries where U.S. pork faces ad-valorum tariffs.”

China, for example, has targeted more than 1,000 agricultural and related products valued at approximately $22.6 billion (2017)—including recent supplementary tariffs—with added tariffs since April of last year, according to the Foreign Agricultural Service.

Moreover, the world can only speculate if and when China will gnaw through its frozen pork stocks and how much Chinese pork demand will remain. As it is, Joel Haggard, senior vice president in charge of the Asia Pacific region for the U.S. Meat Export Federation explained during a media call Tuesday that there is no shortage of pork in Chinese grocery stores and no run-up in prices.