Cattle Current Daily—Sept. 4, 2019

Cattle Current Daily—Sept. 4, 2019

When USDA finished tallying last week’s negotiated cash fed cattle trade, live sales ended up $3 lower in the Southern Plains at $103/cwt., $2-$3 lower in Nebraska at $104-$106 and mostly $1-$3 lower in the western Corn Belt at $107-$109. Dressed trade was mainly $3-$5 lower at $170-$175.

The 5-area direct average steer price last week was $105.59/cwt. on a live basis, which was $1.53 lower than the previous week. The average dressed steer price of $171.52 was down $3.82.

Lower Corn futures helped Feeder Cattle bounce higher to start the week, recovering about half the losses from the previous session. That, along with oversold conditions and surging Lean Hogs helped Live Cattle edge higher.

Except for unchanged in Apr and 2¢ lower in the back contract, Live Cattle futures closed an average of 25¢ higher.

Feeder Cattle futures closed an average of 86¢ higher (35¢ higher to $1.75 higher in spot Sep).

Wholesale beef values were weak to lower on light demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.11 lower Tuesday afternoon at $230.66/cwt. Select was 65¢ lower at $211.62.

Corn futures closed 7¢ to 8¢ lower through Jul ‘20 and then mostly 3¢ to 4¢ lower.

Soybean futures closed fractionally mixed to mostly 1¢ to 2¢ higher.

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Major U.S. financial indices closed sharply lower Monday, on weak manufacturing data and the beginning of new tariffs between the U.S. and China.

Economic activity in the manufacturing sector contracted in August, for the first time in three years, according to the latest Manufacturing ISM® Report On Business®. Specifically, the August Purchasing Managers Index (PMI) of 49.1% was 2.1% lower month to month.

“Comments from the panel reflect a notable decrease in business confidence. August saw the end of the PMI expansion that spanned 35 months, with steady expansion softening over the last four months,” says Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® Manufacturing Business Survey Committee. “Respondents expressed slightly more concern about U.S.-China trade turbulence, but trade remains the most significant issue, indicated by the strong contraction in new export orders. Respondents continued to note supply chain adjustments as a result of moving manufacturing from China. Overall, sentiment this month declined and reached its lowest level in 2019.” 

The Dow Jones Industrial Average closed 285 points lower. The S&P 500 closed 20 points lower. The NASDAQ was down 88 points.

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Agricultural producer sentiment weakened significantly in August, according to the most recent Purdue University/CME Group Ag Economy Barometer. The August reading of 124 was down 29 points from the previous month.

Farmers’ expectations for both current and future economic conditions also tumbled. Compared to a month earlier, the Index of Current Conditions dropped 19 points and the Index of Future Expectations dropped 34 points.

“Sharp declines in most commodity prices during July and early August weighed heavily on farmer sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “While USDA’s announcement of the Market Facilitation Program (MFP) payment rates did help alleviate concerns about 2019 income for many farmers, the big decline in the Index of Future Expectations indicates farmers are becoming more concerned about the future for U.S. agriculture and their farms.”

In late July, USDA announced per-planted-acre payment rates by county for the 2019 MFP. The Ag Economy Barometer survey asked participants to what degree the $16 billion in MFP payments to U.S. farmers relieves their concerns about the impact of tariffs on their 2019 farm income.

More than two-thirds (71%) of respondents feel the 2019 MFP program will, “completely or somewhat relieve,” their concerns about tariffs’ impact on 2019 farm income. However, nearly three out of 10 respondents (29%) said the payments did nothing to relieve their concerns, indicating that a significant minority of farmers think the MFP payments fall short of making up for income losses stemming from ongoing tariff battles.

The barometer is based on a mid-month survey of 400 agricultural producers across the U.S. It was conducted Aug. 12-20, with nearly all of the responses collected following USDA’s release of the Aug. 12 Crop Production report.

2019-09-03T18:58:49-06:00

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