Feeder Cattle futures extended gains on Tuesday, while Live Cattle closed a touch softer as open interest continues to decline, but retained most of the previous session’s gain.
Except for 5¢ higher in away Feb, Live Cattle futures closed an average of 21¢ lower.
Feeder Cattle futures closed an average of 68¢ higher.
Wholesale beef values were steady to weak on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 63¢ lower Tuesday afternoon at $210.93/cwt. Select was 9¢ higher at $207.51.
Corn futures closed mostly 1¢ to 3¢ higher.
Soybean futures closed mostly 2¢ to 3¢ higher.
Major U.S. financial indices jumped Tuesday, with support including news of China taking efforts to stimulate economic growth in the wake of novel coronavirus.
The Dow Jones Industrial Average closed 407 points higher. The S&P 500 closed 48 points higher. The NASDAQ was up 194 points.
Agricultural producer sentiment rose sharply in January, according to the Purdue University/CME Group Ag Economy Barometer. It increased 17 points from December to a reading of 167, led by a significant jump of 24 points in the Index of Future Expectation, one of two sub-indexes that comprise the barometer. The other, the Index of Current Conditions increased 1 point.
Keep in mind the monthly survey of 400 agricultural producers took place around the time that the U.S. and China signed the phase-one trade deal.
“The Phase One Trade Agreement has largely been considered a win for U.S. exporters, although few details are available regarding how the additional $200 billion in purchases by China will be distributed over the next two years and how much impact it will have on the U.S. farm sector,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
Even so, producer expectations continue to improve for increased U.S. agricultural exports over the next five years. As recent as October, only 55% of producers surveyed expected agricultural exports to increase. From November through January, about 70% of those surveyed expect to see an increase in U.S. agricultural exports in the next five years.
Consistently, a small percentage of respondents queried each winter plan to grow rapidly, while a relatively large group has no plans to grow or plans to exit or retire from farming. Those saying they have no growth plans and/or expect to exit/retire has been rising steadily since 2018. In January this year, a combined 56% of respondents said they have no plans to grow or plan to exit/retire, up from 50% in 2019, and up from 39% in 2018.
“The tremendous volatility the ag sector has experienced the last couple of years could be interpreted as a signal to producers to be more cautious regarding future expansion plans,” Mintert says.