Cattle futures closed narrowly mixed on Thursday, capped by pressure from Lean Hogs and the lack of cash direction. Perhaps there was also some hesitation over what Friday’s monthly World Agricultural Supply and Demand Estimates could say about feed prices.
Live Cattle futures closed an average of 26¢ higher.
Feeder Cattle futures closed narrowly mixed, from an average of 9¢ higher across the front half of the board to an average of 19¢ lower.
Wholesale beef values were steady to firm on moderate to fairly good demand and heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 46¢ higher Thursday afternoon at $209.96/cwt. Select was 15¢ higher at $206.68.
Corn futures closed mostly fractionally mixed to 1¢ lower.
Soybean futures closed mostly 4¢ lower.
Major U.S. financial indices posted another day of strong gains Thursday, led by tech stocks.
The Dow Jones Industrial Average closed 211 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 74 points.
Agricultural producer sentiment declined in December, driven by the outlook for current economic conditions, according to the Purdue University/CME Group Ag Economy Barometer.
Specifically, the overall index declined 3 points from November to a reading of 150, while the Index of Current Conditions—one of the sub-indexes—declined 12 points to a reading of 141. Conversely, the index of Future Expectations increased 2 points to a reading of 155.
“These results are indicative of the variability in economic conditions on U.S. farm operations, with some farms performing better than expected and others worse than expected,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The Ag Economy Barometer is based on a mid-month survey of 400 U.S. crop and livestock producers.
Producers were asked whether their farm’s 2019 financial performance was better than expected, as expected, or worse than their initial budget projections. Just over half (52% percent) said their initial projections matched their farm’s financial performance; 30% said it was worse; and 19% said it was better than expected.
To better assess the level of financial stress among U.S. farms, November and December surveys asked producers whether they expected their farm’s 2020 operating loan to be larger, about the same, or smaller than in 2019.
Approximately one out of five respondents in the two surveys expected to have a larger operating loan in 2020 compared to 2019. Of those, three out of 10 indicated the reason was unpaid operating debt from 2019. Carrying over unpaid operating debt from year to year is an indicator of financial stress, and these results suggest that about 6% of farms surveyed for the Ag Barometer in late 2019 were experiencing financial stress.
Producers remained relatively optimistic about the ongoing trade dispute between the U.S. and China being resolved soon and to the benefit of U.S. agriculture.
In December, 54% of respondents stated they expect a resolution soon, which was 3% less than the previous month, but the second most positive response since last March.
The percentage of producers who expect a favorable outcome to U.S. agriculture declined 8 points to 72%. Since the question was first posed in March 2019, more than 70% of respondents have, on average, indicated they expect a favorable outcome to the trade dispute for U.S. agriculture.