Englewood, Colo.-The National Cattlemen's Beef Association (NCBA) says it took immediate action when rumors of foot-and-mouth disease (FMD) in the United States surfaced and subsequently drove the live cattle futures contract lower.
Englewood, Colo.-The National Cattlemen's Beef Association (NCBA) saysit took immediate action when rumors of foot-and-mouth disease (FMD) inthe United States surfaced and subsequently drove the live cattle futurescontract lower.
The association says, "(NCBA) sent a letter today to the CommodityFutures Trading Commission urging an investigation in the recent tradingactivity of the Chicago Mercantile Exchange's Live Cattle Futures Contractsurrounding rumors of FMD.
Rumors circulated in mid-March about cattle suspected of having FMD.As a result, the live cattle contract trade limit closed $1.12 lower thatday.
The U.S. Department of Agriculture later confirmed test samples fromthe cattle were negative for FMD. The market continued trading lower thefollowing day and closed $1.30 lower. The three days after the rumors, thelive cattle contract continued its slide down $3.27.
NCBA contends, "These losses occurred during a seasonally strongcattle market and are unique, because USDA conducts an average of 800 FMDtests annually that do not typically cause market volatility.
Recently, NCBA urged Commodities Futures Trading Commission ChairmanJames Newsome in its letter to investigate, and if discovered, prosecuteany illegal activity, market manipulation or insider trading.