U.S. hog and cattle contracts fell their daily trading limits on Monday, hitting multi-month lows on fears about the spread of a coronavirus in China.
“If we thought China’s coronavirus was making the media rounds late last week, it’s a full-fledged media frenzy this morning,” INTL FCStone said in a note to clients. “The public’s concern there is reminiscent of prior SARS and bird flu events, both of which resulted in slowed Chinese travel, restaurant consumption, and a general slowdown in commerce.”
The outbreak has killed 81 people in China, stranded tens of millions during the biggest holiday of the year and rattled global market. China extended its Lunar New Year holiday and the Shanghai stock exchange said it will reopen Feb. 3. More big businesses in China shut down and told staff to work from home in a bid to contain the disease’s spread.
April live cattle futures reached their lowest price since Oct. 23. The contract dropped its daily limit of 3 cents, ending at 121.300 cents per pound at the Chicago Mercantile Exchange.
CME February lean hog futures fell 1.275 cents to 65.95 cents per pound. The most-active April contract ended down its daily trading limit of 3 cents at 70.450 cents, hitting its lowest since Aug. 7.
The livestock markets will trade with expanded limits on Tuesday.
Traders also said uncertainty about Chinese demand for U.S. meat hung over the market as it waited for signs of stepped-up purchases following an initial trade deal between Beijing and Washington on Jan. 15. (Reporting by Mark Weinraub; editing by Grant McCool)
Source- Reuters US