Hog prices surged this week as the market prepared for Memorial Day weekend, typically a period of high demand.
Lean hog futures rose beyond 94.5 cents per pound on Friday, the highest price since last July. During the week, the market gained more than 3 cents per pound, a 3.3 percent gain.
The market also jumped on news of an outbreak of a new swine disease that causes increased mortality in baby pigs across multiple states, including Indiana, Iowa and Minnesota.
The disease is not considered contagious to human beings or any threat to human health. Nonetheless, fears it could reduce hog supplies in coming months led some meatpackers to buy aggressively in order to secure supplies.
As of midday Friday, hogs for delivery in June were trading at 94.8 cents per pound.
Gasoline market weak
As the summer driving season begins this holiday weekend, many motorists will be pleased to see lower prices at the pump.
Gasoline prices dropped 10 cents per gallon this week, driven lower by a Department of Energy report that showed an increase in gasoline supplies, suggesting that production is outpacing demand.
General economic factors, especially concerns the Federal Reserve’s stimulus may soon end, also weighed on the gasoline market.
As of midday Friday, gasoline futures were trading at about $2.81 per gallon, one of the lowest prices in weeks.
Soybean prices exploded to a six-month high this week, pushing as high as $15.46 per bushel. This rally came as news broke of a sharp increase in Chinese soybean imports.
Because of the increase in Chinese purchases, it is expected U.S. soybean supplies will hit a nine-year low before this fall’s harvest.
Soybean supplies were already low coming into this year because of last year’s drought and ensuing small harvest, but slow selling from South American competitors and strong demand from foreign buyers is threatening to push soy supplies in the U.S. to extreme low levels.
As of midday Friday, soybeans for delivery in July were trading at $14.80, down from their spike high on Thursday but still up a substantial 32 cents (+ 2.2 percent) on the week.
Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.