Cattle futures mostly held within a narrowly mixed range on Tuesday, amid extremely light pre-holiday trade.
Except for 45¢ lower in spot Aug, Live Cattle futures closed an average of 30¢ higher.
Other than 87¢ higher in spot Aug, Feeder Cattle futures closed narrowly mixed, from an average of 24¢ lower to an average of 27¢ higher.
Futures markets will open again on Thursday.
Boxed beef cutout values were lower for Choice and higher for Select with light to moderate demand and heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.62 lower Tuesday afternoon at $210.26/cwt. Select was 94¢ higher at $199.71.
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Major U.S. financial indices closed lower Tuesday, pressured by tech stocks and worries about the tariffs set to go into effect Friday.
The Dow Jones Industrial Average closed 132 points lower. The S&P 500 closed 13 points lower. The NASDAQ closed 65 points lower.
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“Trade concerns pose the single greatest risk to the projected global economic growth of 3-4%,” says Tanner Ehmke, manager of CoBank’s Knowledge Exchange Division (KED). “The U.S. and China have been driving the growth, benefitting emerging markets around the globe. A trade war between the two is dangerous for economies around the world.”
Moreover, according to the most recent Rural Economic Review from CoBank’s KED, uncertainty around trade presents escalating concern to U.S. agriculture, with 70% of U.S. agriculture exports going to destinations that are in current negotiation or trade disputes.
“Aside from potentially losing market share in emerging markets, the U.S. may face shake-ups in historical supply chain commitments, as competitors seek new trade relationships amid current trade disputes,” according to the report.
Although the pork sector is at greatest of risk of trade impacts as the industry expands—with tariffs set to increase in Mexico and China—the report emphasizes total domestic red meat production this year is forecast to increase 3-4%.
“Overall current market conditions including rising interest rates, high fuel costs, relatively high land rental rates and little price relief from other inputs point to a decline in net farm cash income in 2018, continuing the trend from the past few years” says Ehmke. “This indicates the potential for increased debt load as the Federal Reserve considers three more interest rate hikes.”