Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon. USDA’s Agricultural Marketing Service did report a few early trades in Kansas at $105/cwt., but too few to trend. Prices in the region last week were at $112.
Live Cattle and Feeder Cattle futures were limit-up across the board Tuesday, building on what was mostly modest to strong gains in the previous session. Higher outside markets (for most of the session), tied to hopefulness about peak coronavirus infections coming sooner rather than later, provided support. However, declining wholesale beef values, iffy demand patterns going forward, relative to supplies, and early indications of lower cash fed cattle prices this week make it hard to square the move with anything fundamental.
Live Cattle futures closed expanded limit-up $4.50 higher, in light trade.
Feeder Cattle futures closed limit-up $4.50 higher, also amid light trade.
Wholesale beef values were lower on Choice and higher on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $2.17 lower Tuesday afternoon at $227.88/cwt. Select was $2.72 higher at $217.75.
Corn futures closed 2¢ to 3¢ higher.
After fractionally mixed to 2¢ higher through Jan ’21, Soybean futures closed mostly 4¢ to 5¢ higher.
Major U.S. financial indices gyrated wildly Tuesday: sharply higher for much of the session amid continued positive signs that the spread of COVID-19 is slowing; selling off toward the end as investors took money back off the table.
The Dow Jones Industrial Average closed 26 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 25 points.
Concerns about the impact of the global coronavirus pandemic on the agricultural economy drove the Purdue University/CME Group Ag Economy Barometer 47 points lower to 121 in March–the steepest month-to-month decline since the barometer began.
The Ag Economy Barometer is based on a midmonth survey of 400 U.S. agricultural producers and was conducted March 16-20, as the coronavirus crisis escalated in the U.S. and around the world.
“While originally it was thought that the coronavirus effect would be limited to trade with China, now it appears producers are bracing for challenging financial times leading into the 2020 planting season,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
Both sub-indices of the Ag Economy Barometer also recorded their largest one-month declines since the data series began in 2015. The Index of Current Conditions fell 43 points to 111. The Index of Future Expectations dropped 49 points to 126. That’s the lowest since September 2019, when weak commodity prices and an unresolved trade dispute left many farmers concerned over their financial futures.
Among the highlights:
- 74% of respondents said they were either fairly worried (34%) or very worried (40%) about the impact of the virus on their farm’s profitability this year. That sentiment also spilled over into their perceptions of financial performance, with 40% of respondents expecting a worse year compared with 2019.
- 47% of respondents expected the soybean trade dispute with China to be resolved soon, down from a January peak of 69%.
- 68% of respondents expected the trade dispute with China to be resolved in a way that’s ultimately beneficial to U.S. agriculture. An average of 80% of respondents thought so in January and February.
- 62% of survey respondents anticipated USDA providing Market Facilitation Program payments to U.S. farmers for the 2020 crop year, compared to 45% in February.