Courtesy of Benzinga.
The return of bovine spongiform encephalopathy, also known as mad cow disease, prompted a USDA press conference and a major plunge in cattle futures.
Live cattle futures on the Chicago Mercantile Exchange fell by as much as the 3-cent-per-lb daily limit on Tuesday on fund liquidation and selling stemming from rumors that a case of mad cow disease was discovered in California, Reuters reported, citing traders.
The mad cow rumor has sent the iPath DJ-UBS Livestock TR Sub-Index ETN (NYSE: COW) lower by 2.3% on volume that is more than 50% above the daily average. In other words, more bad news for an ETN that has lost over 44% of its value over the past five years even as cattle prices and beef demand have soared. COW tracks a basket of futures contracts that is roughly two-thirds live cattle and one-third lean hogs.
Proving that there is such a thing as too many obscure commodities ETNs, COW rivals such as the iPath Pure Beta Livestock ETN (NYSE: LSTK) and the UBS E-TRACS CMCI Livestock TR ETN (NYSE: UBC) haven't even traded today. In fact, LSTK hasn't traded since April 18 and UBC hasn't traded since April.
The Market Vectors Agribusiness ETF (NYSE: MOO), the largest equity-based agribusiness ETF, is modestly lower on the mad cow news.
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