Through Friday afternoon, negotiated cash fed cattle prices for the week were $4-$5 less on a live basis at $115/cwt. in the Southern Plains and Nebraska. Dressed trade was $3-$5 less in Nebraska at $185-$187 and mostly $7 lower in the western Corn Belt at mainly $183.
Through Thursday, the average five-area direct steer price was $115.07/cwt. on a live basis, which was $4.70 less than a week earlier. The average dressed steer price of $185.45 was $4.65lower.
Cattle futures took another strong step lower Friday, with ongoing pressure in outside markets from novel coronavirus fears, as well as week-end and month-end position squaring.
Other than 7¢ higher in expiring Feb, Live Cattle futures closed and average of $2.04 lower ($1.45 lower toward the back to $2.90 lower at the front).
Feeder Cattle futures closed an average of $1.62 lower.
Wholesale beef values were steady on Choice and lower on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 24¢ lower Friday afternoon at $205.30/cwt. Select was 78¢ lower at $198.91.
Corn futures closed mostly fractionally mixed to 1¢ lower.
Soybean futures closed mostly 2¢ to 4¢ lower.
Major U.S. financial indices mostly fell hard again Friday but closed off of session lows. Fears about novel coronavirus and its potential impact on the domestic and global economies continued to fuel the pressure. Federal Reserve Chair Jerome H. Powell, quelled some fears with this statement late Friday:
“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”
The Dow Jones Industrial Average closed 357 points lower. The S&P 500 closed 24 points lower. The NASDAQ was fractionally higher.
Increasing market uncertainty last week, tied to the global spread of novel coronavirus, (COVID-19) took Cattle futures down as steeply as last summer’s plunge following the packinghouse fire in Kansas.
Week to week on Friday, Feeder Cattle futures closed an average of $7.74 lower, while Live Cattle futures closed an average of $6.34 lower. The week following the Tyson fire, Feeder Cattle were down an average of $5.48 and Live Cattle were down an average of $6.53.
Managed money—lots of it—and electronic, algo trading at lightening speeds is likely magnifying market volatility and momentum.
COVID-19 is nothing new, making headlines since the first case was identified in China last December. But fears ratcheted higher last week as economic impact appeared more pronounced in countries like China and South Korea as the likelihood of a pandemic grew.
For instance, the USDA Foreign Agricultural Service (FAS) issued an assessment last week about the current economic impact of COVID-19 in South Korea. “The local economy is slowing down due to weak retail sales and reduced economic activity. Many companies have temporarily closed their offices and processing facilities for the week of Feb. 23 to prevent spread of the virus,” according to the report. “The Korea Economic Research Institute (KERI) reported Feb. 24 that its Business Survey Index (BSI) for February 2020 fell to 78.9, down 7.6 points from January, the lowest level since February 2009.”
As of Feb. 26, 1,146 people in South Korea tested positive for the virus; 11 deaths. A week earlier, the number of cases in Korea was 51.
Meanwhile, according to the World Health Organization, there were 79,394 confirmed COVID-19 cases in China as of Feb. 29. Estimates of current and future economic impact vary widely. Already, companies like Apple are telling investors that previous revenue guidance for the next quarter is likely overstated as COVID-19 in China slows production, constrains supply chains and dampens demand in that nation.
Here at Home
As of Saturday, according to WHO, there were 62 COVID-19 cases in the U.S. The first death, due to the disease, was confirmed over the weekend.
“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. However, it’s important to note that current global circumstances suggest it is likely that this virus will cause a pandemic…,” according to last Tuesday’s situation summary from the Centers for Disease Control and Prevention (CDC).
Wednesday evening, CDC confirmed an infection with the virus that causes COVID-19 in California, in a person who reportedly did not have relevant travel history or exposure to another known patient with COVID-19.
“It’s possible this could be an instance of community spread of COVID-19, which would be the first time this has happened in the United States,” according to the CDC statement. “Community spread means spread of an illness for which the source of infection is unknown. It’s also possible, however, that the patient may have been exposed to a returned traveler who was infected.” So far there are 15 confirmed COVID-19 cases in the U.S.