Pork Belly Prices Advance
Pork futures prices advanced Wednesday on the Chicago Mercantile Exchange as traders reacted to a report showing declining inventories and a stronger Canadian dollar.
“We had a small net decline in the number of frozen pork bellies in storage,†said Chuck Levitt, an analyst for Shearson Lehman Bros. Inc. in Chicago. “The storage situation looks much more favorable.â€
The Canadian dollar gained against its U.S. counterpart for a second straight day, a development Levitt said could help stem the flood of Canadian pork products.
“The strength in the Canadian dollar today shows that at least it’s a two-way street, not a one-way street,†said Levitt. Hog shipments from Canada are running about six times higher than levels than two years ago, he said.
A weaker Canadian currency translates into less expensive Canadian imports in this country, he said.
Firmer cash prices also helped fuel Wednesday’s rally in the pork pits. Traders, inspired by the stronger cash prices, are sensing a longer-term upside adjustment in the futures market, Levitt said. “The feeling is that the worst may be over.â€
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