Cattle Markets Retreat On Coronavirus Concerns
Cash fed cattle prices traded at $110 in the south and $109 - $110 in the north, $3 to $4 lower than the previous week. Cattle sold on a dressed basis at $175 to $176, declining $3 to $7.
April and June live cattle futures prices hit new contract lows Friday and closed down the daily trading limit of $4.50 at $95.575 and $89.75, respectively. For the week, June live cattle dropped $10.275. May feeder cattle futures closed down $6.275 at $114.47 Friday and also hit a new contract low. For the week, May feeders were down $16.68.
Cattle markets will continue to be influenced by the uncertainties surrounding coronavirus, and the sharp selloff in the financial markets. The DOW finished the week with a near 2,000-point gain (9.4%), the DOW’s largest ever one-day point gain.
All trader eyes, including those in the cattle futures, were on the dramatic price action in the global stock and financial markets this week, which saw the U.S. stock indexes slip into bear market territory and U.S. Treasury bond yields drop to record lows below 1.0%, suggesting a U.S. and/or global economic recession looms. That’s a very bearish prospect for U.S. and worldwide demand for beef, and futures markets reacted accordingly.
Steers and heifers sold at auction $5 to $10 lower nationwide, according to Agricultural Marketing Service reporters.
Cattle Slaughter under federal inspection was estimated at 630,000 for the week, 17,000 less than last week and 22,000 more than a year ago. Demand for meat products used at home have continued to be at the forefront. The foodservice and meat packing industry are concerned short term as many events have been cancelled or postponed.
The Choice beef cutout closed $1.46 lower at $206.01, while Select was $4.69 lower at $197.78. The Choice-Select spread was $8.13.
