Cattle Current Daily—Sept. 2, 2020

Cattle Current Daily—Sept. 2, 2020

Negotiated cash fed cattle trade was $1 lower Tuesday, at $104/cwt. on a live basis in the Texas Panhandle, according to the Agricultural Marketing Service. Although too few transactions to trend, early prices also were lower in other regions: $103-$104 in Kansas, $103 in Nebraska and $102.50-$103.00 in the western Corn Belt. Early dressed sales in Nebraska were at $163-$164.

Even so, Cattle futures continued to mostly edge higher.

Other than 2¢ lower in away-Dec and $2.70 higher in recently minted away-Feb, Live Cattle futures closed an average of 31¢ higher.

Except for 17¢ lower in spot Sep, Feeder Cattle futures closed an average of 39¢ higher. 

Choice boxed beef cutout value was 39¢ higher Tuesday afternoon at $228.34/cwt. Select was 57¢ lower at $214.75.

Corn futures closed fractionally higher to 1¢ higher.

Soybean futures closed mostly 3¢ to 5¢ higher.

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Major U.S. financial indices closed higher on Tuesday. Along with continued support from big tech stocks, positive manufacturing data boosted optimism.

“After the coronavirus (COVID-19) brought manufacturing activity to historic lows, the sector continued its recovery in August, the first full month of operations after supply chains restarted and adjustments were made for employees to return to work,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management®(ISM®) Manufacturing Business Survey Committee. “The August PMI®registered 56%, up 1.8 percentage points from the July reading of 54.2%. This figure indicates expansion in the overall economy for the fourth month in a row after a contraction in April, which ended a period of 131 consecutive months of growth.”

The Dow Jones Industrial Average closed 215 points higher. The S&P 500 closed 26 points higher. The NASDAQ closed 164 points higher.

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Agricultural producer sentiment increased significantly from July to August, according to the Purdue University/CME Group Ag Economy Barometer. The index rose to a reading of 144, up 26 points, to the highest level since February of this year, when record highs were established before the pandemic began.

The Ag Economy Barometer is based on survey responses from 400 U.S. agricultural producers and was conducted Aug. 17-21.

Both of the barometer’s sub-indices also recorded substantial increases. The Index of Current Conditions improved to a reading of 124, up 13 points from July, while the Index of Future Expectations increased 33 points to a reading of 154.

“With a positive crop production outlook, rebounding commodity prices, and news of additional export sales to China, producers were much more optimistic about the future for the U.S. agricultural economy,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Producers also were more optimistic about U.S. agriculture’s trade prospects compared to the past several months. In August, 67% of respondents said they expect exports to rise over the next five years, compared to 57% during the spring and summer months of this year. In part, Mintert attributes this change in perspective to rising export sales to China that began over the summer and now appear likely to continue into fall.

Producer perspectives toward land values also improved in August. Those expecting land values to increase over the next 12 months rose to 20% in August, up from 16% in July and 7% back in April. The percentage of producers expecting values to increase in the next five years rose to 59%, up from 48% in July and just 40% in May.

The percentage of respondents who expect their equity position to decline in the upcoming 12 months was 38% in August, the second lowest percentage since the survey question was first asked in 2016 and well below 48% a year earlier.

2020-09-01T19:41:20-05:00

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