CME update: cattle futures tumble as surge in coronavirus sparks demand worries
US cattle futures plummeted on 19 November on worries about demand for beef as soaring COVID-19 infections across the country threatened more restaurant and food service closures and forced more Americans to shelter at home.
20 November 2020
1 minute read
Reuters reports that investors also fear a repeat of the livestock processing disruptions seen in the spring as rising COVID-19 cases at meat plants backed up livestock supplies and dragged futures prices to the lowest in a decade or more.
"There's some demand concern coming forward after our spring mess," said Matthew Wiegand, broker with FuturesOne. "To what degree can we hold up the processing pace? As of today, we're not seeing major problems, but it's in the back of everyone's mind."
Strong beef export sales data on Thursday morning failed to stem the drop in the cattle market, he said.
The US Department of Agriculture (USDA) said a total of 60,499 tonnes of beef were sold for export in the week ended 12 November, more than three times the average weekly sales pace this year.
In addition, lofty feed grain prices, with corn futures hovering near 16-month highs and soybeans at the highest in more than four years, weighed on feeder cattle futures on Thursday.
Chicago Mercantile Exchange December live cattle fell 2.400 cents to 108.250 cents per pound, while actively traded February futures dropped 2.625 cents to 110.525 cents per pound. January feeder cattle were 1.750 cents lower at 135.550 cents per pound.
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Source: Reuters
