Cattle futures closed lower Tuesday, with pressure including technical correction, sharp declines in front-month Lean Hogs and the fact that Corn futures were an average of 17¢ higher week to week through the front four contracts.
Except for 5¢ and 7¢ higher on either end of the board, Live Cattle futures closed an average of 35¢ lower.
Feeder Cattle futures closed an average of $1.21 lower (75¢ to $1.75 lower).
Wholesale beef values were higher on Choice and lower on Select, with moderate to good demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.03 higher Tuesday afternoon at $213.47/cwt. Select was $1.06 lower at $186.05.
Corn and soybean futures continued higher Tuesday, with follow-through support from the previous day’s Grain Stocks report and on likely short covering.
Corn futures closed 3¢ to 5¢ higher through Jul ’20 and then mostly unchanged to 1¢ lower.
Soybean futures closed 10¢ to 13¢ higher through May ’20 and then 3¢ lower to 9¢ higher.
Major U.S. financial indices closed solidly lower on Tuesday, pressured by weak manufacturing data.
Economic activity in the manufacturing sector contracted in September, as the overall economy grew for the 125th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The September Purchasing Managers Index PMI® was 47.8% in September, which was 1.3% less than the previous month.
“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® Manufacturing Business Survey Committee. “September was the second consecutive month of PMI contraction, at a faster rate compared to August. Demand contracted, with the New Orders Index contracting at August levels, the Customers’ Inventories Index moving toward ‘about right’ territory and the Backlog of Orders Index contracting for the fifth straight month (and at a faster rate). The New Export Orders Index continued to contract strongly, a negative impact on the New Orders Index.”
The Dow Jones Industrial Average closed 343 points lower. The S&P 500 closed 36 points lower. The NASDAQ was down 90 points.
Agricultural producers grew more pessimistic about current ag-economic conditions in late summer, according to the September Purdue University/CME Group Ag Economy Barometer.
The overall Ag Economy Barometer reading dipped three points from August to a reading of 121 in September, but the Index of Current Conditions, a sub-index of the barometer, dropped 22 points to a reading of 100. The barometer is based on a mid-month survey of 400 agricultural producers across the U.S.
“Even though farmers are concerned about the near term, both on their own farms and for the ag economy, improved crop growing conditions during the last half of the summer appeared to boost optimism regarding the future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The Index of Future Expectations, another sub-index of the Ag Economy Barometer, rose six points compared to August.
One in five producers polled for the September survey said they expect profitability to decline over the next year, compared to 41% that expected declining profits when the same question was posed in May.
“Considered jointly with this month’s decline in the Index of Current Conditions, this could be a signal that growers expect better times in 2020 compared to 2019, possibly because they are looking forward to a return to more normal growing conditions and crop production in 2020,” Mintert says.