CANADA-IMPACT OF SWINE FLU.
Hog futures dropped to a seven-week low on speculation that pork demand will shrink after swine flu was found among pigs in Canada . Cattle also declined.
Canada reported the world’s first case of the virus jumping from a human to a pig. A farm worker in the province of Alberta probably transmitted the ailment after a trip to Mexico , where the most illnesses have occurred, Dr. Brian Evans, the executive vice president of the Canadian Food Inspection Agency, told reporters on May 2. The hogs were quarantined and there is no risk to the food supply, Evans said.
"The new case in Canada of pork transmission is a little bearish" for futures, said Rich Nelson, a broker at Allendale Inc. in McHenry , Illinois . "And new cases are continuing to show up in other countries" in humans, he said.
Hog futures for June settlement fell 1.8 cents, or 2.7 percent, to 63.775 cents a pound on the Chicago Mercantile Exchange. The price earlier slipped to 63.7 cents, the lowest for a most-active contract since March 11. Futures tumbled 8.5 percent last week, after the initial reports of humans contracting swine flu.
Pork-belly futures for July delivery rose 0.675 cent, or 0.9 percent, to 78.8 cents a pound. On May 1, futures jumped 3 cents, the most allowed by the CME, on speculation pork demand would rebound. The price still plunged 13 percent last month.
China Import Ban
China , the world’s largest pork consumer, banned imports of the meat from Alberta as a precaution, the official Xinhua News Agency reported. China also has restricted shipments from 19 U.S. states, after human cases of the virus were reported.
The Geneva-based World Health Organization has confirmed 1,085 human cases of the virus, formally known as A/H1N1, in 21 countries.
The risk of the virus moving from pigs to humans is "remote," Evans said. The WHO and the U.S. Department of Agriculture have said that eating properly cooked pork is safe and that the virus isn’t transmitted through the meat.
Wholesale pork prices have declined 6.9 percent since the initial outbreak was reported, dropping to 55.68 cents a pound on May 1, according to USDA data. Eleven countries have blocked imports of some U.S. pork.
Prices will rebound "only if we get these export restrictions taken off," Nelson said.
On the CME, cattle futures for June delivery fell 0.225 cent, or 0.3 percent, to 81.875 cents a pound. Feeder-cattle futures for August settlement rose 0.225 cent, or 0.2 percent, to 98.675 cents a pound.
Wholesale choice beef fell 0.19 cent to $1.4831 a pound at midday, dropping for the fourth straight session, according to the USDA. The price rose 11 percent in April.
Beef demand may shrink as U.S. pork exports fall, sending prices lower and making pork more attractive to domestic consumers, Nelson said.
"We are not going to see consumers move to beef," Nelson said. "Beef is going to continue to move lower, based on the fact that there will be more pork in the U.S. , from us not exporting it."
