Chicago | Reuters — U.S. lean hog futures fell their expanded daily limit on Friday on fears that the coronavirus pandemic could curb consumer demand for meat and threaten the workforce at slaughterhouses, traders said.
“The germophobia is in full force,” said Don Roose, president of Iowa-based U.S. Commodities.
Traders are considering that more widespread testing for coronavirus might uncover infections among workers at meat packing plants, Roose said. Slaughterhouses are already grappling with a tight labour supply.
“Maybe one of those people has a problem, and maybe that helps cause a shutdown of a packing plant,” Roose said, potentially backing up hog supplies.
The North American Meat Institute said it was not aware of any disruptions in the industry other than travel restrictions for employees.
The Chicago Mercantile Exchange April lean hogs contract settled down its expanded limit of 4.5 cents at 56.375 cents/lb., a contract low (all figures US$). Daily trading limits were widened for Friday’s session after futures settled down the regular three-cent limit on Thursday, and will remain at 4.5 cents for Monday, the CME said.
The coronavirus has affected a host of major sporting events, raising fears the demand for pork and beef could slow. The National Basketball Association and National Hockey League seasons were both suspended, Major League Baseball delayed its season start and U.S. college basketball’s “March Madness” tournament was canceled.
“You can’t quantify what the demand is, with all these big events shutting down,” Roose said.
CME live cattle and feeder cattle futures also fell sharply, with the benchmark contracts in each market tumbling the expanded daily maximum at times.
The CME April live cattle contract ended down the daily limit of 4.5 cents at 95.575 cents/lb., and most-active June settled down 4.5 cents at 89.75 cents. Limits on live cattle futures for Monday will remain at 4.5 cents.
CME April feeder cattle settled down 6.425 cents at 112.6 cents/lb. Daily limits for feeder cattle futures will revert to 4.5 cents on Monday, after widening to 6.75 cents for Friday’s session.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.