CME update: cattle futures reach one-week high, rebounding from COVID-19 losses
US live and feeder cattle set one-week highs on 16 April as markets reverse coronavirus-related losses.
17 April 2020
2 minute read
According to Reuters, live cattle futures have been recovering since the June contract to $24 under cash prices on Monday. This historically large discount was attributed to worries about declining slaughter capacity as coronavirus infections among staff members force processing plants to close.
Major processors including JBS USA and National Beef Packing Company have closed beef plants due to COVID-19 infections.
"The spread between cash and where the futures was trading was just way too wide," said Altin Kalo, agricultural economist for Steiner Consulting.
June live cattle futures rose 1.650 cents to 86.475 cents per pound and touched its highest price since 8 April at the Chicago Mercantile Exchange. May feeder cattle futures climbed 2.900 cents to 118.475 cents per pound.
Traders continued to focus on shutdowns of pork and beef plants.
National Beef says it is suspending operations at a beef plant in Dodge City, Kansas. The plant will be cleaned and stainless steel partitions will be installed on the production floor to increase social distancing. Slaughtering will halt on Thursday, Friday and Saturday. The company says that the part of the plant where employees slice carcasses into meat will be closed on Saturday, Monday and Tuesday.
According to USDA data, meat packers slaughtered an estimated 92,000 cattle, down from 99,000 a week ago and from 122,000 a year earlier.
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