Although Cattle futures tested stability early in yesterday’s session, they crumbled again, beneath overall market panic about novel coronavirus and its potential economic impact. Losses, however, were less than the previous day.
Live Cattle futures closed an average of $1.70 lower through the front four contracts and then an average of 56¢ lower.
Feeder Cattle futures closed an average of $2.06 lower (85¢ to $3.47 lower). That’s an average of $6.32 lower in the last two sessions.
Wholesale beef values were firm on Choice and sharply lower on Select, with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 40¢ higher Tuesday afternoon at $207.47/cwt. Select was $2.47 lower at $199.90.
Grain futures rebounded, perhaps with the help of the lower U.S. dollar.
Corn futures closed mostly fractionally higher to 2¢ higher.
Soybean futures closed mostly 4¢ to 5¢ higher.
Major U.S. financial indices plunged lower for the second consecutive session Tuesday, again plagued by escalating fears about novel coronavirus—dubbed Coronavirus Disease 2019 (COVID-19)—and how it will impact global economic growth. The virus causing COVID-19 is named SARS-CoV-2.
A key driver in Tuesday’s decline appeared to be the latest Coronavirus Disease 2019 Situation Summary issued by the Centers for Disease Control and Prevention (CDC).
“For the general American public, who are unlikely to be exposed to this virus at this time, the immediate health risk from COVID-19 is considered low,” according to the CDC summary. “However, it’s important to note that current global circumstances suggest it is likely that this virus will cause a pandemic. In that case, the risk assessment would be different.”
CDC defines a pandemic as: “A global outbreak of a new influenza A virus. Pandemics happen when new (novel) influenza A viruses emerge which are able to infect people easily and spread from person to person in an efficient and sustained way.” There were four pandemics in the last 100 years, according to CDC.
The Dow Jones Industrial Average closed 879 points lower. The S&P 500 closed 97 points lower. The NASDAQ was down 255 points. In the last two sessions, those indices are down 1,910 points, 208 points and 610 points, respectively.
So far, there is little visible impact, positive or negative, from the U.S.-China Phase One Economic and Trade Agreement, including before novel coronavirus began disrupting some supply chains. But, China has taken numerous actions to begin implementing its agriculture-related commitments under the agreement, on schedule, according to U.S. Secretary of Agriculture Sonny Perdue and United States Trade Representative Robert Lighthizer on Tuesday.
Among the actions Perdue and Lighthizer cite:
Lifting the ban on imports of U.S. poultry and poultry products, including pet food containing poultry products.
Lifting restrictions on imports of U.S. pet food containing ruminant material.
Updating lists of facilities approved for exporting animal protein, pet food, dairy, infant formula, and tallow for industry use to China.
Updating the lists of products that can be exported to China as feed additives.
Additionally, China began announcing tariff exclusions for imports of U.S. agricultural products subject to its retaliatory tariffs, and it announced a reduction in retaliatory tariff rates on certain U.S. agricultural goods.
“President Trump and this Administration negotiated a strong trade agreement with China that promises significant benefits for American agriculture,” explains Secretary Perdue. “We look forward to realizing these benefits this year and are encouraged by progress made last week. We fully expect compliance with all elements of the deal.”