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USDA Secretary Sonny Perdue directed the Packers and Stockyards Division to investigate beef pricing margins after the Holcomb, Kansas plant fire. The probe checks for price manipulation, collusion or unfair practices amid a sharp drop in fed cattle prices and a rise in boxed beef values.
A federal investigation into packer margins creates uncertainty for packers and can pressure fed cattle bids while the probe is open.
wlj.netPete Crow, WLJ publisher emeritusAug 29, 2019After 30 past bearish policy events, Live Cattle moved a median -0.8% over 5 sessions (43% higher; middle half -2.0% to +1.1%), and +0.9% over 20.
After 24 past bearish policy events, Feeder Cattle moved a median +0.3% over 5 sessions (54% higher; middle half -3.3% to +1.2%), and +0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
On Aug 29 USDA ordered a probe of packer margins amid panic selling of cattle, which added to sentiment-driven selling pressure on feeder futures on the day of the drop.
