Equities and futures markets plunged deeper Thursday amid a growing list of event cancellations, altered business schedules and continued widespread panic related to coronavirus and its impact on the domestic and global economies.
Except for $2.97 lower in the back two contracts, Live Cattle futures closed limit-down $3.00.
Feeder Cattle futures closed limit-down $4.50 across the board.
Wholesale beef values were lower on Choice and higher on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $1.16 lower Thursday afternoon at $206.01/cwt. Select was $1.39 higher at $197.88.
Corn futures closed mostly 3¢ to 6¢ lower.
Soybean futures closed mostly 10¢ to 14¢ lower.
Major U.S. financial indices had their worst day since 1987, according to market pundits.
The Dow Jones Industrial Average closed 2,352 points lower. The S&P 500 closed 260 points lower. The NASDAQ was down 750 points. So, over the last two sessions, the Dow Jones Industrial Average is down 3,816 points, the S&P 500 is down 400 points and the NASDAQ is 1,142 points lower.
Although COVID-19 and the ensuing panic are upending markets, Stephen Koontz, agricultural economist at Colorado State University, noted earlier in the week that signs of slowing domestic and global economic growth were already increasing.
The broader U.S. macro economy entered the current debacle in reasonably good shape, with healthy levels of employment and consumer spending. At the same time, in the most recent issue of In the Cattle Markets, Koontz points out business investment was relatively weak and had been since it became clear that trade issues and their impact on the global economy would continue to linger.
Koontz also notes government spending stimulus was due to run its course this year, while any economic growth from tax cuts appeared focused in subsectors rather than the economy as a whole.
Globally, Koontz explains macroeconomics were much weaker than in the U.S. For instance, he says economic growth for European and Asian economies was modestly to substantially weaker year over year.
Cattle market headwinds were also swirling ahead of coronavirus.
“Protein balance sheets have clearly shown and continue to show a problem for the first quarter of 2020 for beef, and for much of the year for pork and poultry. Numbers of animals and carcass weights are higher through the first quarter and have the potential to be higher for the rest of the year for the competing meats,” Koontz explains. “Downward pressures on protein prices required substantial exports to not have much weaker prices than the prior year. Supplies have materialized and exports have not. Global economic uncertainty adds to this. For cattle markets, price pressure will persist through April and possibly into May. Placements through the last half of 2019 were delayed by the slaughter plant fire. October and November placements were strong. On-feed numbers and marketings will be relatively heavy until the summer. And slaughter weights are substantially above last year…
“These factors, and the broader macroeconomic concerns, suggest persistent weakness in cattle prices through the spring. And, until the dynamics of the health crisis are more certain, there will be considerable volatility.”