Economic - Markets
CME update: cattle futures dive as erratic trade continues
According to reporting from Reuters, CME June live cattle finished down 4.125 cents at 89.425 cents per pound while the nearby April contract fell the 4.5-cent limit to 100.950 cents.
CME May feeder cattle futures settled down 4.5 cents at 120.925 cents a pound.
Limits for live cattle will remain at 4.5 cents for Monday's trade and feeder cattle limits will widen to 6.750 cents, the exchange said.
A worker at a Smithfield Foods plant in Sioux Falls, South Dakota, tested positive for the coronavirus, the Argus Leader newspaper reported on Thursday, raising fears among traders of possible shutdowns. Smithfield Foods officials could not be reached for comment.
"That news that a Smithfield plant employee tested positive for the virus has people scared that we are going to have to shut a plant down and lose capacity," said Brian Hoops, president of Midwest Market Solutions.
Separately, the Canadian Food Inspection Agency did shut production at Harmony Beef, an Alberta packing plant, due to concerns about the spread of COVID-19, an industry group said Friday.
However, some traders said concerns about bottlenecks of cattle were overblown.
"That was a great fear in the market a couple of weeks ago, but now we are dealing with it and it is really not causing the backup in hog numbers or cattle numbers," said Dennis Smith, commodity broker for Archer Financial Services in Chicago.
"The profit margins are so fantastic [that] these packers have every incentive in the world to figure this out," Smith said.
