TheDairySite.com - news, features, articles and disease information for the dairy industry

News

CME update: cattle futures retreat as COVID-19 surge stokes demand worries

19 November 2020

US cattle futures plunged on 18 November as rising COVID-19 infection rates sparked concerns about potential supply chain disruptions and reduced demand for beef as health restrictions shutter restaurants and discourage travel.

Reuters reports that US stocks dove on Wednesday 18 November as investors weighed surging COVID-19 infections and mounting shutdowns against encouraging vaccine developments.

An April plunge in cattle futures to decade lows during the first US coronavirus spike remains fresh in traders' minds.

"The whole livestock complex is concerned about another shutdown," said Craig VanDyke, analyst with Top Third Ag Marketing. "It's a problem for the protein sector."

Chicago Mercantile Exchange December live cattle dropped 0.675 cent to 110.650 cents per pound, while actively traded February futures fell 0.425 cent to 113.150 cents per pound. January feeder cattle tumbled 2.425 cents to 137.300 cents per pound.

Wholesale beef prices remain firm, but investors fear the rise could be short-lived.

"They're loading up right now, tying to store as much as they can and then see what happens. If there's a slowdown in the chain, they'll then still have product to move," VanDyke said.

The US Department of Agriculture (USDA) said the choice boxed beef cut-out jumped $2.12 on Wednesday to $235.84 per cwt, the highest since June.

Disappointing cash cattle sales at central and southern Plains feedlot markets added pressure to futures.

A small number of cattle traded at Plains feedlots at $110 per cwt, steady with the top trades last week. Firm packer bids earlier in the week had initially fuelled hopes that cash prices would be higher this week.

Read more about this story here.

 

Source: Reuters



Partners


Seasonal Picks

Managing Pig Health: A Reference for the Farm - 2nd Edition