Negotiated cash fed cattle trade continued on Tuesday up north with dressed sales steady to $9 lower than the previous day at mostly $178/cwt.
Softer cash tones and the expected plunge in wholesale beef values pressured Cattle futures.
Except for 42¢ lower in the back two contracts, Live Cattle futures closed an average of $1.83 lower, from $1.07 lower toward the back to limit $3 lower in spot Jun.
Feeder Cattle futures closed an average of $2.01 lower.
Choice boxed beef cutout value was $22.42 lower Tuesday afternoon at $318.73/cwt. Select was $26.25 lower at $290.58.
Corn futures closed mostly 2¢ to 3¢ higher.
Soybean futures closed 7¢ to 10¢ higher through Aug ’21 and then mostly 4¢ higher, perhaps helped along by the notice of 132,000 metric tons of export sales to China for 2020-21.
Major U.S. financial indices closed higher again Tuesday, buoyed once again by trader optimism regarding the opening of the U.S. economy.
The Dow Jones Industrial Average closed 267 points higher. The S&P 500 closed 25 points higher. The NASDAQ closed 56 points higher.
Producer sentiment improved in May, although more are concerned about the pandemic’s impact on their operation’s profitability, according to the latest Purdue University/CME Group Ag Economy Barometer.
The index was up 7 points from April to a reading of 103, but it remained nearly 40% below its all-time high of 168 set in February of this year. The Ag Economy Barometer is based on responses from 400 U.S. agricultural producers. The May survey was conducted May 18-22.
More specifically, the Ag Economy Barometer includes the Index of Current Conditions and the Index of Future Expectations. The former improved 11 points in May to 83; the latter was up 4 points to a reading of 112. Another sub-index, the Farm Capital Investment Index increased 12 points to a reading of 50.
Although each sub-index improved in May, each was down more than 30% compared to February, before coronavirus impacted markets.
“This month’s survey was conducted the same week that USDA announced the details of the Coronavirus Food Assistance Program (CFAP), so awareness of that program’s details could be one of the key reasons for this month’s barometer improvement,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Yet some farmers remain worried about their bottom line and are still looking for options to alleviate those concerns.”
In the May survey, more than 70% of respondents indicated they were very worried (34%) or fairly worried (37%) about the impact of coronavirus on their farm’s profitability, up from 67% in April. Their two biggest concerns were market access (42%) and financial (39%). Two-thirds of survey respondents indicated they believe it will be necessary for Congress to pass another bill to provide more economic assistance to U.S. ranchers and farmers.
More than 25% of respondents who rent farmland said they expect to ask their landlords to lower their cash rental payments in 2021 as a result of COVID-19. Mintert suggests this could lead to downward pressure on cash rental rates next year.