Just as headlines surrounding a trade deal with China turn positive, the outbreak of coronavirus in Wuhan, China, has placed additional fear in markets around the world. As of this writing, we have 213 confirmed deaths from the virus that has infected 9,800 globally. Stock markets and energy markets have all seen losses this week, spurred by the unknown of what effect this could actually have on global trade.
The benchmark Dow Jones Industrial Average saw a more than 700-point loss for the week and nearly erased all gains posted earlier in the month. Crude oil saw its second massive weekly loss, shedding $4 per barrel for the week. Through all of the turmoil, safe havens, like gold and silver, even struggled to post gains throughout the week.
Cattle markets struggled as well, with the live and feeder cattle markets posting more than $4 losses in the April contracts. The bi-annual cattle inventory report was released Friday afternoon and showed a decrease in the total cow herd of 391,000 head. This marked the first decrease in cattle inventories in six years. Hopefully, this will provide enough positivity to recover some of the losses sustained the past two weeks.
The lean hog market suffered the worst losses this week, with April Lean Hogs losing $12 per hundredweight for the week. Most contract months gapped lower nearly every day this week. The need for pork in China has been one of the major driving forces behind the positivity surrounding the hog market, but fears of what the coronavirus may do to that demand has many fearful, and therefore taking a backseat to the market until there is more clarity.
Grain markets suffered tremendous losses as well, with March Kansas City wheat losing $0.20 for the week, March soybeans off $0.30, and March corn down $0.05. Kansas City wheat found support late week at the 463.25 level, while corn has been able to hold above the 378 level. Soybeans appear to have been the worst for the week, many are hopeful we have already found the market catching some support in the 867 to 872 neighborhood.
Schwieterman, Inc. is a full-service commodity brokerage firm. If you would like more information on commodity markets or our brokerage services, contact Eric Relph at 800-272-9131 or www.upthelimit.com.
Note: This material has been prepared by a sales or trading employee or agent of Schwieterman, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Schwieterman, Inc. Research Department.