Negotiated cash fed cattle prices were $2-$3 lower in the Southern Plains Tuesday at $120/cwt., with slow trade and light to moderate demand.
Apparently, prices finally fell enough and conditions were oversold enough for buyers to get back on the long side of Cattle futures. That was despite sharply negative outside markets, tied to the lack of a trade resolution with China.
Except for unchanged in spot Jun, Live Cattle futures closed an average of 48¢ higher.
Feeder Cattle futures closed an average of 93¢ higher.
Wholesale beef values were sharply lower on light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $3.13 lower Tuesday afternoon at $223.87/cwt. Select was $2.15 lower at $211.83.
Corn futures closed mostly 1¢ to 2¢ higher.
Except for a few cents higher in the back contracts, Soybean futures closed mostly fractionally mixed to 2¢ lower.
Major U.S. financial indices plunged on Tuesday, with reports attributed to the U.S. Trade Representative that the U.S. will increase tariffs on Chinese imports this Friday, as suggested by President Trump over the weekend. Whether gamesmanship or reality, traders ran for cover.
The Dow Jones Industrial Average closed 473 points lower. The S&P 500 closed 48 points lower. The NASDAQ was down 159 points.
Producer sentiment plunged last month, with the Purdue University-CME Group Ag Economy Barometer diving 18 points to 115 points, month to month in April. That’s the fourth largest one-month drop since data collection began in October 2015.
Worsening perceptions of both current economic conditions and weaker expectations for the future drove the decline. The Index of Current Conditions fell 21 points to a reading of 99, and the Index of Future Expectations declined 16 points to a reading of 123.
“Farmers are becoming increasingly anxious over their future financial performance,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Producers have taken stock of their financial position and prospects for 2019 as they head into planting season and are concerned about the uncertainty arising from the ongoing trade disputes with key ag trading partners. Right now it seems that producers are being cautious.”
For instance, only 22% of respondents to the April survey believed now was a good time to make large farm investments.
Producers also expressed less optimism for resolution to the ongoing soybean trade dispute with China: only 28% of respondents felt that the dispute would be resolved before July 1, down from 45% in March. However, 71% still feel the dispute will ultimately be resolved in a way that benefits U.S. agriculture.
The Ag Economy Barometer is a sentiment index based on a monthly survey of 400 agricultural producers across the U.S.