CHICAGO, March 10 (Reuters) - U.S. live cattle futures closed higher on Tuesday, following as Wall Street charged back from the prior day’s steep losses as the world’s biggest economies moved to cushion the impact of the coronavirus, traders said.
The rally in global equity markets overshadowed bearish fundamentals in the cattle market, including declining cash cattle prices in recent weeks and uncertainty about consumer demand for steaks and other pricey cuts of beef given the threat of a global recession.
“It’s just a consolidation after the big sharp decline the last couple of days,” Altin Kalo, agricultural economist for New Hampshire-based Steiner Consulting, said of the bounce in cattle futures. “It seems we’ve thrown the fundamentals out the window here for a minute,” Kalo said.
Equity markets jumped as hopes of government stimulus calmed investors’ fears surrounding the coronavirus and signs of imminent recession. U.S. President Donald Trump said he will take “major steps” to allay market fears by asking Congress for a fiscal stimulus package to include a payroll tax cut, among other measures.
Chicago Mercantile Exchange April live cattle settled up 2.600 cents at 105.450 cents per pound and June cattle rose 2.425 cents at 99.525 cents a pound.
CME April feeder cattle settled up 2.400 cents to end at 127.950 cents per pound, trading under expanded daily limits after Monday’s limit-down close. Daily limits for feeder cattle futures will revert to 4.5 cents for Wednesday’s trade.
CME lean hog futures followed the firm trend, closing higher along with cattle futures and equities. Steady to firmer cash hog markets lent support, traders said.
The benchmark April lean hogs contract settled up 2 cents at 65.000 cents per pound.
The U.S. pork cutout rose by a penny on Tuesday afternoon, and cash hog prices in the closely watched Iowa and southern Minnesota market rose by $1.17, according to the U.S. Department of Agriculture. (Reporting by Julie Ingwersen; Editing by Tom Brown)