Home 
Daily Jurojin Archive
Daily Jurojin Archive
| Daily Jurojin - Thursday, May 7, 2009 |
 |
 |
Thursday, May 7, 2009 Don't turn your nose up at a pig!If we opened today's commentary by saying that the Mexican authorities had fewer cases of swine flu to report in recent days, we'd be doing disservice to pig famers. Instead, we should join the now familiar term used in mainstream media to describe the H1N1 flu virus. You can't catch flu from eating a pig. At least not a well-prepared one!But when the U.S. government announced that they were taking the swine flu outbreak seriously, sales of pork plummeted. And we all not what that brings! Pork prices also took a swan dive on lower demand. Lean hogs were trading at around 72 cents per pound on the CME ahead of the Mexican outbreak. But pork's sudden 'ewww!' factor saw prices dump around 11% to 64 cents per pound within days. As we noted in Monday's Daily Jurojin, we adore prices of open outcry commodities thanks to the transparency they convey. The relationship or rather the lack of it between La Grippe and lean hog or frozen pork belly prices of course has ramifications for prices of other commodities. Cattle prices also fell heavily. While you might think that consumers would switch from pork to beef, cattle farmers were ahead of you all as they slaughtered more cattle, increasing supply and driving down prices of feeder cattle. This week, as the number of new flu cases stopped rising and as better education of how the virus is or isn't infected, retailers have stocked up on fresh pork leading prices sharply higher. Now that isn't to say that prices are back to pre-epidemic levels, but they had their sharpest ever daily percentage gain as technical buying escalated when stops were triggered. Meatpackers sold more pork on Tuesday than on any single day since January 2002 thanks to a sharp reduction in pork inventories. The strength in physical sales - the equivalent of 239 truckloads of little piggy chops according to USDA data - sparked a buying frenzy in the futures markets. June hogs rose 3.5% to 67.1 cents while frozen pork bellies rose 2% to 81.4 cents per pound. As many as 13 countries have banned exports of U.S. pork since the crisis broke. Those include China and Russia and recent price increases possibly fail to account just yet for the likely lifting of those bans. The world is slowly getting back to normal after the Mexican health scare. Reports of gradually improving conditions make the Mexican peso all the more appealing - on Wednesday it rose against the dollar once more. The Supreme Council of the Secret Order of Jurojin |
