CHICAGO, March 3 (Reuters) - Chicago Mercantile Exchange live cattle futures weakened with equities on Tuesday, while hog futures advanced.
Moves in the cattle market have nearly mirrored those in equities since last week, traders said, with the global spread of the new coronavirus fueling sharp moves.
All three major U.S. stock market indexes dropped more than 3% after the U.S. Fed made its first emergency rate cut since the 2008 financial crisis to shield the U.S. economy from the impact of the fast-spreading virus.
“Commodities have started to closely follow the outside markets, mainly the equities, which is causing a build in volatility,” said Karl Setzer, commodity risk analyst for AgriVisor.
April live cattle closed 0.050 cent lower at 110.100 cents per pound. June futures, the second-most-active contract, fell 0.600 cent to 103.375 cents per pound.
April feeder cattle ended down 1.275 cents at 133.775 cents per pound. On Friday, the contract touched its lowest price since September.
April lean hogs, the most-active contract, settled 0.750 cent higher at 63.550 cents per pound. June hog futures rose 1.050 cents to 78.075 cents.
Lean hog futures ended higher on bargain buying and hopes for increased Chinese purchases of U.S. pork, analysts said.
The coronavirus outbreak clouded the outlook for Chinese demand, after Beijing pledged to buy more American farm goods as part of an initial trade deal signed in January. But some workers in China who stayed home because of the outbreak have since returned to work at ports, where containers of imported meat are received.
“We’re starting to see some of the port congestion start to clear,” an analyst said.
Traders are hoping for accelerated Chinese buying of U.S. pork to reduce large American supplies. China needs to increase pork imports from around the world after a fatal pig disease, African swine fever, decimated its herd.
Brazilian food processor BRF SA reported that strong sales to China helped it to record its first annual profit in four years. Yet the world’s largest chicken exporter still sees volatility in 2020 from the effects of the coronavirus.
U.S. meat companies slaughtered an estimated 495,000 hogs on Tuesday, steady from a week earlier and up from 475,000 a year ago, according to the U.S. Department of Agriculture.
Cash cutout prices were $0.24 per cwt higher for carcasses but $1.01 lower for hams, the agency said. (Reporting by Tom Polansek in Chicagod; editing by Jonathan Oatis)