CME update: cattle futures falter as coronavirus fears cloud outlook on beef demand
Markets retreat as COVID-19 fuels worries about beef demand.
6 March 2020
1 minute read
According to reporting from Reuters, US cattle futures slid on Thursday as the global spread of the coronavirus stoked fears of an economic slowdown that could hurt demand for beef.
US demand for beef has remained stable and trended towards strength since last year, helping push April live cattle futures to a contract high in December 2019. However, on Friday, futures set a contract low that was down 16 percent from their previous peak as COVID-19 fears hit Wall Street.
Global equity markets have trended downwards as the number of confirmed coronavirus cases outside China rose, fuelling warnings that global growth is likely to reach its weakest level since the financial crisis in 2008.
"The fear is the beef demand is going to take a hit here in the near term," said Dennis Smith, commodity broker for Archer Financial Services in Chicago.
Most actively traded April live cattle closed 2.625 cents lower at 108.650 cents per pound at the Chicago Mercantile Exchange. The contract low on Friday was 107.475.
June live cattle futures, the second-most-active contract, sank 1.875 cents to 102.650 cents per pound. April feeder cattle fell 1.900 cents to 133.650 cents per pound.
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