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Chinese bird flu makes demand for U.S. meat

Anonymous • Apr 26, 2013 at 4:00 PM

Here is this week’s edition of Futures File, our weekly commodities wrap-up:


Spring fever helps beef demand

Crave a cook-out? Americans who have been hankering for a hamburger may finally get their chance to roll out the grill and release their pent-up demand for beef, pork and chicken. The US population consumes more meat per capita than any other nation and has been losing patience with cold, rainy weather.


Growing concerns of a new strain of bird flu in China (H7N9 Avian Virus) and subsequent massive culling of duck and chicken flocks could create a substitute demand for U.S. produced meat as a protein source for Chinese consumers. June cattle and hogs futures contracts have rallied more than two cents per pound in the past two weeks in anticipation of larger seasonal demand.


While livestock prices have moved up, the price for “new crop” corn has declined, as hopes for clearer weather brighten. Many grain producers throughout the corn and soybean belt have experienced planting delays due to their fields being too cold, too wet, or even flooded. Corn prices rose briefly on further weather concerns. By week’s end, however, warmer, sunny weather, and the expectation of the planting of a record large crop sank prices toward a new low close near $5.22 per bushel. As usual, it’s difficult for farmers to achieve high prices and good weather at the same time.


Gasoline gears up for summer

After hitting a three-month low last week, gasoline futures have rebounded as the market shifts its attention to the summer driving season, which will soon mark an increase in driving and gasoline demand.


Gasoline consumption this summer is expected to be the lowest in twelve years, primarily due to increases in fuel economy, but analysts are hopeful that a stronger US economy could help boost demand. Better economic numbers this week, including the lowest number of new jobless claims in over five years, helped to fuel a rally that pushed gasoline prices as much as 10 cents per gallon above last week’s low.

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