Cattle futures weakened Tuesday, pressured by lower wholesale beef prices, the weaker cash outlook and worries about House Speaker Nancy Pelosi’s visit to Taiwan potentially straining the already frayed relationship between the U.S. and China.
Feeder Cattle futures closed an average of $1.08 lower (57¢ to $1.65 lower).
Live Cattle futures closed an average of 17¢ lower, except for 2¢ higher in Jun.
Grain and Soybean futures closed lower again Tuesday with weather pressure and steady crop condition ratings week to week and year over year.
Corn futures closed 11¢ to 15¢ lower through Sep ‘23 and then mostly 5¢ to 8¢ lower.
Soybean futures closed mostly 12¢ to 19¢ lower.
Negotiated cash fed cattle trade was slow on light demand in the western Corn Belt through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $143/cwt. but too few to trend. Elsewhere, trade was at a standstill.
Last week, live prices were $135/cwt. in the Southern Plains, $138 in Nebraska and $141-$145 in the western Corn Belt. Dressed prices were $225 in Nebraska and $224-$228 in the western Corn Belt.
Choice Boxed beef cutout value was $2.14 lower Tuesday afternoon at $268.46/cwt. Select was $1.35 lower at $241.55/cwt.
Major U.S. financial indices settled lower Tuesday with the aforementioned concerns about increased tension between the U.S. and China.
The Dow Jones Industrial Average closed 402 points lower. The S&P 500 closed 27 points lower. The NASDAQ was down 20 points.
CME WTI Crude Oil futures closed 53¢ to $1.17 higher through the through the front six contracts.
Agricultural producer sentiment increased 6 points from June to July to a reading of 103, according to the latest Purdue University/CME Group Ag Economy Barometer. The Index of Current Conditions rose 10 points to 109 and the Index of Future Expectations rose 4 points to 100. All three indices were still 23-24% lower than a year earlier.
“Even though we saw a slight uptick in sentiment this month, there is still a tremendous amount of uncertainty in the agricultural economy,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Key commodity prices, including wheat, corn and soybeans, all weakened during the month and producers remain concerned over rising input prices and input availability.”
Producers’ views on farmland values diverged this month as the Short-Term Farmland Value Index declined 9 points to 127, while the long-term index rose 9 points to 150. The short-term index is down 20% from its peak reading in 2021, while the long-term index is only 6% lower than the peak reached last year. Short-term there was a shift away from expectations that farmland values will go higher, with more producers in July expecting values to remain about the same.
“The short-run and long-term farmland indices don’t always move in tandem, but the magnitude of this month’s divergence between the short and long-term indices is unusual,” Mintert says. “Producers who expect values to rise over the upcoming five years continue to say that non-farm investor demand and inflation are the two primary reasons they expect values to rise.”
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 July 11-15.