Chicago | Reuters — U.S. livestock futures fell on Wednesday, pressured by sharp declines in the equities markets and uncertainty about demand due to the COVID-19 coronavirus pandemic.
The cattle and hog markets surged on Tuesday because of strength in the cash market after consumers cleared out grocery store shelves in anticipation of being homebound for an indeterminate amount of time.
But questions about long-term demand weighed on prices and worries about the financial health of the restaurant industry returned on Wednesday as stocks plunged after rallying on Tuesday.
“It is a nervous trade centred around the coronavirus,” said Don Roose at U.S. Commodities in West Des Moines, Iowa. “Short-term demand is strong to very strong. Does that mean the demand sinks or stays strong? It is a very nervous, volatile market.”
CME May feeder cattle futures contract settled down 3.325 cents at 108.525 cents/lb. (all figures US$).
CME June live cattle futures were 3.825 cents lower at 85.925 cents/lb.
CME April lean hog futures were off 0.325 cent at 58.15 cents/lb.
“The meat markets are reshaping supply lines,” INTL FCStone chief commodities economist Arlan Suderman wrote in a note to clients. “People are preparing to eat at home for a while, hoarding supplies from the meat case at their local supermarket.”
— Mark Weinraub is a Reuters commodities correspondent in Chicago.