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CME update: cattle futures dive on coronavirus pandemic

03 April 2020

US cattle futures tumbled as concerns mount over skyrocketing unemployment and a possible recession as the coronavirus pandemic continues.

According to reporting from Reuters, concerns over the pandemic triggered widespread liquidation across the beleaguered livestock markets.

Both live and feeder cattle dropped by their daily trading limits for a second session, sending most live cattle contracts to new life-of-contract lows.

Beef prices have been falling after a recent surge that was fuelled by consumer stockpiling as several US states issued stay-at-home orders and closed restaurants to stem the tide of coronavirus infections.

Cash cattle prices have also faded as packers are slowing meat output to closely match weaker demand, and that is backing up supplies of market-ready animals.

"We pulled all this demand forward... Now, the pipeline's full and not moving like it was," said Matthew Wiegand, commodity broker for FuturesOne.

Chicago Mercantile Exchange (CME) April live cattle fell to 92.825 cents per pound, while actively traded June futures finished at 83.075 cents, both down by their expanded 4.5-cent daily limit.

May feeder cattle futures ended at 111.650 cents a pound, one of five contracts that ended down the expanded daily limit of 6.75 cents.

The trading limits for the commodities will remain at their expanded levels of 4.5 cents on Friday for live cattle and 6.75 cents for feeders.

The choice boxed beef cutout dropped to $232.64 per cwt, down $20.93 from a week ago. Cash cattle at southern US Plains feed lot markets traded $8 per cwt lower this week, according to USDA data.

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