By Joanna Newman
THE wholesale pork market has fallen sharply over the past week following its traditional volatility as it responds strongly to short-term swings in supply and demand.
Bellies dropped from 56¢/lb (77p/kg) to about 48-50¢ on Tuesday (18 May). Recent higher pork values made beef more competitive and may have triggered a demand switch to beef, resulting in the latest drop in pork prices.
Meanwhile, the rally that took pig futures prices to their highest level in a year has also proved to be short-lived.
The Chicago June futures contract dropped on Tuesday to 57.9¢/lb, down sharply from 60¢/lb a week ago.
The Chicago futures market failed to find support from the cash market.
Live pig prices at the terminals are stagnating at around 36¢/lb (49p/kg), while lean cash values have declined to 53.0-53.5¢/lb from 53.5-54.0¢ late last week.
Pig and pork prices continue to be depressed by structural oversupply in the US domestic pig industry.
The market is nervous ahead of this Fridays release of the latest monthly Cold Storage report, which is expected to confirm record high inventory levels of pork in cold storage.