As the summer driving season begins this holiday weekend, many motorists will be pleased to see lower prices at the pump. Gasoline prices dropped 10 cents per gallon this week, driven lower by a Department of Energy report that showed a build in gasoline supplies, suggesting that production is outpacing demand.
General economic factors, especially concerns that the Federal Reserve's stimulus may soon end, also weighed on the gasoline market. As of midday Friday, gasoline futures were trading near $2.81 per gallon, one of the lowest prices in weeks.
Hogs Hurry Higher
Hog prices surged this week as the market prepared for Memorial Day weekend, typically a period of high demand. Lean hog futures rose over 94.5 cents per pound on Friday, the highest price since last July. During the week, the market gained more than 3 cents per pound, a 3.3% gain.
The market also jumped on news of an outbreak of a new swine disease that causes increased mortality in baby pigs across multiple states, including Indiana, Iowa and Minnesota. The disease is not considered contagious to human beings or any threat to human health. Nonetheless, fears that the disease could reduce hog supplies in coming months led some meatpackers to buy aggressively in order to secure supplies. As of midday Friday, hogs for delivery in June were worth 94.8 cents per pound.
Soybean prices exploded to a six-month high this week, pushing as high as $15.46 per bushel. This rally came as news broke of a sharp increase in Chinese soybean imports. Due to the increase in Chinese purchases, it is expected that US soybean supplies will hit a nine-year low before this fall's harvest.
Soybean supplies were already low coming into this year due to last year's drought and ensuing small harvest, but slow selling from South American competitors and strong demand from foreign buyers is threatening to push soy supplies in the US to extreme low levels.
As of midday Friday, soybeans for delivery in July were worth $14.80, down from their spike high on Thursday, but still up a substantial 32 cents (+2.2%) on the week.