U.S. livestock: Cattle, hogs dive as coronavirus rattles markets

April live cattle, most feeder contracts close limit-down

CME April 2020 live cattle with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago Mercantile Exchange cattle and hog futures plunged on Monday as a surge of coronavirus cases beyond China stoked fears of U.S. meat export delays and slower global economic growth.

The actively-traded April live cattle contract and nearly all feeder cattle contracts closed down by their daily trading limits, triggering expanded limits on Tuesday. Lean hog futures ended with their steepest losses of the month in actively traded nearby contracts after posting limit losses early in the session.

World equities markets and energy prices fell sharply on Monday as fears about the global impact of the novel COVID-19 coronavirus intensified, after several countries reported a rise in virus cases over the weekend.

The coronavirus worries overshadowed expectations for accelerated U.S. exports to China, particularly of pork, the country’s favourite meat. China and the United States signed a trade deal last month that directed China to significantly raise purchases of U.S. products.

U.S. Treasury Secretary Steven Mnuchin told Reuters he does not expect the outbreak to have a material impact on the Phase One U.S.-China trade deal, although that could change as more data becomes available in coming weeks.

Benchmark CME April live cattle futures ended down the three-cent daily limit at 115.25 cents/lb. CME April feeder cattle dropped by the daily limit of 4.5 cents to 137.6 cents/lb.

Trading limits will expand to 4.5 cents on Tuesday for live cattle and to 6.75 cents for feeders, the CME Group said.

CME lean hog futures for April delivery ended down 2.4 cents at 64.625 cents/lb.

The coronavirus worries overshadowed a slightly supportive U.S. Department of Agriculture (USDA) cattle-on-feed report released after the close on Friday that showed on-feed supplies and cattle placements slightly below market expectations.

USDA’s monthly cold storage report, issued after the close on Monday, showed increases in U.S. beef and pork stocks in January.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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