A hog virus ravaged the pork industry during the last year, killing off piglets and driving prices to record highs, but the virus is largely under control and farmers have begun vamping up pork production again.
Even though the national herd is far smaller than previous years, the animals are much larger, averaging nearly 20 pounds heavier than usual for this time of year.
Hog producers have been able to offset animal losses by fattening up the remaining hogs on inexpensive corn, which fell to a new four-year low again this week, dropping to $3.64 per bushel.
As a result, large pork supplies are weighing on the market now, sinking prices.
Meatpackers planning for the end of the grilling season are beginning to pull back on their pork purchases as well, hoping for even lower prices, which is hurting demand.
As of midday Friday, August lean hogs traded for $1.18 per pound, the lowest price since April.
Petroleum prices plunge
Crude oil prices continued sliding this week, dropping to the lowest price in nearly six months.
Although there has been little fresh bearish news that should knock prices lower, this week's drop in crude oil and gasoline prices will be a welcome relief to U.S. drivers.
Since peaking out in late June during the height of the Iraqi insurgency, crude has shed more than $9 per barrel, while gasoline prices have fallen nearly 30 cents per gallon.
At midday Friday, crude oil futures were worth $97.25 per barrel, while gasoline futures traded for $2.75 per gallon, a price that represents the wholesale value of gasoline, without taxes, transportation or other expenses included.
Longer-term, analysts warn there are numerous factors that could make the petroleum markets spike higher.
Ongoing conflicts in Syria, Palestine, and Iraq could escalate and disrupt the flow of crude from the Mideast. Looming sanctions against Russia because of its involvement in the Ukrainian crisis could restrict oil exports from the world's second-largest seller. Finally, there have been increasing signs the U.S. will begin exporting a significant portion of its domestic crude oil production, with some industry experts predicting that as much as 10 percent of U.S. crude could soon flow out of our country, potentially raising domestic prices.
Otherwise, without an outside shock, ballooning North American crude oil production could continue increasing supplies, keeping a lid on prices.
Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.