Chicago | Reuters — U.S. cattle futures plunged on Monday to their lowest in nearly a decade, with traders citing uncertainty about what the coronavirus pandemic will mean for long-term demand.
Hog futures also were sharply lower, sinking to their lowest since October 2018.
All fed cattle contracts and most hog contracts settled down the daily 4.5-cent trading limit. The fed cattle contracts will trade with expanded limits of 6.75 cents on Tuesday, CME Group said.
“The concerns are about restaurant demand and future overall demand,” said Rich Nelson, chief strategist for commodity broker Allendale in Illinois. “Much of the trade still thinks the worst is in front of us.”
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The most-active CME May fed cattle futures contract settled down 4.5 cents at 109.975 cents/lb. Fed cattle contracts hit new lows across the board.
CME June live cattle futures were down 4.5 cents at 85.25 cents/lb. Live cattle contracts also hit new lows across the board.
On a continuous basis, the front-month live cattle contract hit its lowest since July 2010 and front-month fed cattle hit its lowest since October 2010.
CME April lean hog futures dropped 2.4 cents to 53.975 cents/lb.
“Food service, institutional (schools), and travel demand is in freefall, while we see pics of cleaned out meat counters in grocery stores,” INTL FCSTone said in a note to clients. “It’s a massive rerouting of demand.”
— Mark Weinraub is a Reuters commodities correspondent in Chicago.
