Chicago | Reuters — U.S. hog and cattle futures fell on Wednesday on worries that the coronavirus outbreak would stall U.S. exports of pork and beef into China, traders said.
Wall Street equity markets soared on reports that scientists were developing a vaccine for the deadly virus.
But hog and cattle futures on the Chicago Mercantile Exchange (CME) declined, with traders citing expectations that logistics problems caused by the outbreak would slow the pace of pork shipments to China at a time of plentiful U.S. supplies.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
“We have been relying on China the last few months, at least, to absorb an ever-increasing portion of the (pork) supply that we have. If that stops, even temporarily, it has a significant impact on the markets,” said Altin Kalo, agricultural economist for New Hampshire-based Steiner Consulting.
Most-active CME April lean hog futures settled down 0.45 cent at 61.875 cents/lb., the contract’s fifth lower close in the last six sessions (all figures US$).
Traders were waiting to see whether the U.S. Department of Agriculture’s weekly export sales report on Thursday would show a slowdown in weekly shipments of U.S. pork to China.
Adding to bearish sentiment, the U.S. pork cutout fell $2.83 on Wednesday afternoon, and cash hog prices in the closely watched Iowa and southern Minnesota market dropped by $3.33, according to USDA.
CME live cattle and feeder cattle futures closed lower in sympathy with lean hogs and on bearish technical signals, in the absence of news from the cash cattle market.
CME April live cattle futures settled down 1.475 cents at 119.175 cents/lb. and front-month February fell 0.875 cent to close at 120.75 cents.
CME March feeder cattle futures fell 1.825 cents to end at 135.675 cents/lb.
The wholesale choice boxed beef cutout value fell 21 cents to $210.72/cwt on Wednesday while select cuts were up 43 cents at $207.94/cwt, USDA said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
