Pork beats oil and gold as hottest US commodity
Supported by stable demand and limited supply the price of pork
futures has performed the best on the Dow Jones-UBS commodity
index, the Wall Street Journal reports.
Investors turned to pork looking for high yielding assets on the
back of falling prices on other commodities such as coffee or
gold, according to the WSJ.
In the $12 billion hog-futures market, "everybody's happy and
making money and having fun," WSJ quotes Dennis Smith, a
Chicago-based broker for Archer Financial Services.
The rally in hog futures got a boost last month when the world's
biggest pork processor Smithfield Foods agreed to a $4.7 billion
takeover by China's Shuanghui International Holdings. The deal
would be the biggest Chinese takeover of a US company, the WSJ
reports. Market players expect US pork exports to China will rise
if the deal is completed.
According to Bloomberg, hog futures surged to a two-year high on
speculation US consumers bought more pork than beef for grilling
for the Independence Day holiday on July 4 as supermarkets have
increased their promotions. Pork demand has risen due to its
lower price compared to beef, which hit record prices at retail
"The US consumer doesn't want beef anymore," Bloomberg
quotes Archer Financial's Dennis Smith. "It's a problem for
Once the rally in hogs cools, traders will lose interest and move
their money to other markets, according to the WSJ. Hog futures
"are the flavor of the month," the WSJ quotes Jason Britt,
president of the brokerage Central States Commodities.