Another Black Swan Hits Cattle Markets

Rout was on in cattle markets
Rout was on in cattle markets
(AHA)

Fears over the coronavirus wiped out more than $3 trillion in the equities markets this week. Livestock and grain markets were hammered, too.

The coronavirus meltdown is the second black swan event for cattlemen in six months, but many fear this is worse than the Tyson packing plant fire. Worse because of the uncertainty. With the Tyson fire the industry knew the extent of the damage and had realistic ideas of how long the event would last.

With the coronavirus traders are uncertain of the damage or how long it will impact markets. And as we are remined regularly, markets don’t like uncertainty.

CME Cattle futures extended the week’s losses as fears the coronavirus will hurt global growth and demand for beef. Volume on Thursday’s trade was the most in 13 months, suggesting new shorts as some contracts hit new lows.

April live cattle futures hit another contract low Friday and finished down $2.90 at $107.675. For the week, April live cattle lost a whopping $10.675. March feeder cattle futures hit a 5.5-month low Friday and finished the session down $1.30 at $131.275, and for the week fell $8.375. Both futures markets closed at technically bearish weekly and monthly low closes Friday.

The rout spilled into the cash trade, with fed cattle unusually active early in the week. Hedged sellers pushed sales early this week and volumes will be higher from last week. Monday saw cash cattle trades at $116, but by Thursday $115 was the norm, with a few cattle trading lower. Compared to last week that would be $3 to $4 lower.

Cattle sold in the North on a dressed basis at $185 to $187 which is $3 to $5 lower. Choice beef cutout closed $0.21 higher at $205.30, while Select was $2.79 lower at $198.91. The Choice-Select spread was $6.39.

Steers and heifers sold at auction $4 to $10 lower in the North and Southcentral regions, and $2 to $4 lower in the Southeast. AMS said feeder cattle still reported moderate to good demand.

Related stories:

Profit Tracker: Margins Stall, Prices Steady

 

Latest News

Biden Administration Restores Wildlife Protections
Biden Administration Restores Wildlife Protections

The U.S. Fish and Wildlife Service plans to reinstate rules protecting endangered plants and animals, action that would reverse changes made during the Trump Administration that weakened the Endangered Species Act.

Across Breed EPD Adjustment Factors
Across Breed EPD Adjustment Factors

EPDs from multiple breeds can be compared by adding/subtracting the appropriate adjustment factors to the EPDs resulting from the most recent genetic evaluations for each of 18 breeds.

APHIS Now Thinks Wild Birds Are to Blame for Highly Pathogenic Avian Influenza's Arrival on Four U.S. Dairies
APHIS Now Thinks Wild Birds Are to Blame for Highly Pathogenic Avian Influenza's Arrival on Four U.S. Dairies

The livestock industry continues to grapple with the first confirmed cases of HPAI in cattle, while federal and state agencies continue to assure consumers there's no concern about the safety of the U.S. milk supply.

Skills Survey Reveals U.S. Agriculture & Food Industry Workforce Needs and Gaps
Skills Survey Reveals U.S. Agriculture & Food Industry Workforce Needs and Gaps

U.S. employers report challenges in finding suitable job candidates with work-ready skills to fill open roles in ag. The AgCareers.com U.S. Skills Survey offers insights, data and trends to address skill development.

USDA Authorizes CRP Graze and Hay Donations to Wildfire Victims
USDA Authorizes CRP Graze and Hay Donations to Wildfire Victims

Conservation Reserve Program (CRP) participants can donate emergency grazing authority to ranchers in Nebraska, Oklahoma and Texas impacted by recent wildfires.

New Guide Helps Producers Maximize Values of Cull Cows
New Guide Helps Producers Maximize Values of Cull Cows

A new resource developed by the National Cattlemen’s Beef Association and CattleFax helps cattle producers maximize profitability from their culling decisions.