Negotiated cash fed cattle trade was mostly inactive on very light demand in Nebraska and the western Corn Belt through Tuesday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service. Last week, live prices were at $111/cwt. in the Southern Plains, $110-$111 in Nebraska and $109-$110 in the western Corn Belt. Dressed trade was at $172-$174.
Cattle futures closed higher on Tuesday, supported by ongoing strength in wholesale beef values and the outlook for steady to higher cash prices this week.
Live Cattle futures closed an average of 47¢ higher.
Feeder Cattle futures closed an average of 81¢ higher.
By the way, winter wheat condition improved week to week, according to the USDA Crop Progress report for the week ending Nov. 29. 46% was rated as Good (40%) or Excellent (6%) versus 43% the previous week and 52% the previous year. 18% was rated as Poor (13%) or Very Poor (5%) compared to 21% the prior week and 14% the prior year.
Choice boxed beef cutout value was 28¢ lower Tuesday afternoon at $243.40/cwt. Select was 65¢ higher at $223.08.
Corn futures closed mostly 3¢ to 5¢ lower through Sep ’21 and then mostly 1¢ to 2¢ lower.
Soybean futures closed 4¢ to 6¢ lower.
Major U.S. financial indices closed higher Tuesday. Support included news of a new proposed economic stimulus plan and hawkish comments from Janet Yellen, President-elect Biden’s choice for Treasury Secretary, who stressed urgency in the nation taking more strides in addressing the economic fallout borne by the pandemic.
The Dow Jones Industrial Average closed 185 points higher. The S&P 500 up closed 40 points higher. The NASDAQ was up 156 points.
Agricultural producer sentiment declined in November, according to the Purdue University/CME Group Ag Economy Barometer. It dropped 16 points to a reading of 167 after setting a record high in October.
“This is the opposite of what happened following the November 2016 election. That year producers became much more optimistic about the future following the election and, in turn, that optimism about the future helped drive the Ag Economy Barometer up sharply in late 2016 and early 2017,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The Index of Future Expectations fell 30 points to a reading of 156 in November. However, the on-going rally in commodity prices and CFAP-2 payments continued to support producers’ view of current economic conditions with the Index of Current Conditions rising 9 points in November to 187, an all-time high for the index.
To learn more about what factors might be motivating the shift in producers’ sentiment before and after the November election, a series of questions focused on producers’ future expectations for environmental regulations, taxes and other key aspects of the agricultural economy were included in both the October and November surveys.
Comparing results from October to November, far more producers in November said they expect to see: 1) environmental regulations impacting agriculture to tighten over the next five years; 2) higher income tax rates for farms and ranches; 3) higher estate tax rates for farms and ranches; 4) less government support for the U.S. ethanol industry and 5) a weaker farm income safety net provided by U.S. government program policies.
Also of note, since the summer of 2019, Purdue researchers have been tracing producers’ perceptions regarding the ongoing trade dispute between the U.S. and China. Specifically, the survey asks whether respondents think the dispute will be resolved soon and if the outcome will ultimately benefit U.S. agriculture. In January and February of this year, 80% of survey respondents said they expected to see the trade dispute with China be resolved in a way that benefits U.S. agriculture. In November, though, only 50% had the same expectation. Only 44% of respondents in November think it’s likely that China will fulfill the Phase One Trade Agreement requirements, down from 59% a month earlier.