Front-month Live Cattle futures firmed Tuesday, following pressure in the previous session, perhaps suggesting traders took a harder look at currently favorable fundamentals; open interest continues to grow. Feeder Cattle gave back the previous day’s gains amid light trade.
Except for 47¢ higher in spot Apr, Live Cattle futures closed narrowly mixed (20¢ lower to 5¢ higher).
Feeder Cattle futures closed an average of 70¢ lower.
Corn futures closed mostly 1¢ to 2¢ higher.
Soybean futures closed 1¢ to 2¢ lower through Mar ’20 and then mostly fractionally higher.
Wholesale beef values were firm on fairly good demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 49¢ higher Tuesday afternoon at $224.04/cwt. Select was 58¢ higher at $217.79.
Major U.S. financial indices leaked lower Tuesday. Support included strong quarterly earnings from retailers such as Target and Kohl’s. Drag included the lack of resolution to trade talks between the U.S. and China.
The Dow Jones Industrial Average closed 13 points lower. The S&P 500 closed 3 points lower. The NASDAQ was down 1 point.
Farmer sentiment weakened last month amid increasing concerns about marketing risk and continued uncertainty around tariffs, according to the latest Purdue-CME Group Ag Economy Barometer.
The February barometer—based on a survey of 400 U.S. agricultural producers—declined 7 points from the previous month to 136.
“Last month we saw a significant boost in optimism among agricultural producers after the announcement of the second round of MFP payments; however, it appears the positive impact eroded quickly,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Compared to responses from a year ago, fewer farms said they expect their operation to grow in the future, which could be a sign of increasing financial stress. We’re also seeing a growing number of farms concerned about marketing risk, ranking it as the biggest risk facing their operations.”
The monthly survey includes measures of producer sentiment toward current conditions and future expectations. In February, both indexes declined. The Index of Current Conditions saw the biggest drop, down from 132 to 119, whereas the Index of Future Expectations weakened slightly, down from 148 to 145.
When producers were asked whether they have plans to grow or increase the size of their current operation in 2019, 50% of respondents said that they either “have no plans to grow” or “plan to reduce in size,” compared to 39% in 2018. Last month, when 25% of farmers surveyed indicated they expected to take out a larger operating loan in 2018 versus 2019, a follow-up question found that 27% of those farms were taking out larger loans due to unpaid operating debt carryover, suggesting they were experiencing financial stress.