Hog prices slammed to a seven-month low this week on the heels of a World Health Organization report that showed links between processed meats and colorectal cancer. The WHO report classified processed meats like bacon, sausage, and deli meats as a Class 1 carcinogen, indicating the highest level of confidence that the foods increase risks of cancer.
The same report also listed all red meats, like pork, beef, and lamb, as a probable carcinogen and recommended reducing consumption of processed and red meats.
While beef prices dipped only slightly, lean hog prices fell over 3.5 cents per pound (-6%), feeling the pressure as some shoppers decided to forgo bacon in lieu of foods that weren't in the headlines this week.
Fed Keeps Rates Flat
The Federal Reserve Board maintained the status quo on Wednesday, keeping interest rates at the record low 0-0.25% level. This continues the Fed's policy of ultra-low rates that it has had in place since late 2008 in an effort to keep borrowing costs low and boost the economy after the economic crisis.
The Fed indicated that the economy isn't quite ready for an interest rate jump, but suggested that they may raise rates as soon as the next meeting in December.
Even though this meeting disappointed those waiting for higher rates, the increased likelihood of a raise yet this year encouraged investors to sell Treasury bonds and gold, two investments that could be hurt by higher interest rates. Meanwhile, the Fed's increasing confidence in the US economy inspired traders to push stocks to a two-month high.
Crude Oil's Wild Ride
Crude oil began the week with a plunge to the lowest level seen in two months. Prices have been under pressure as US oil inventories remain near record highs, even in the face of cutbacks in US oil exploration. However, prices under $43 sparked investor interest, especially as military tensions have been rising globally.
The US Navy recently challenged Chinese claims to islands in the South China Sea, potentially setting off a diplomatic row with China. Meanwhile, the US is increasing its military presence in Syria, which increases the likelihood of a run-in with Russian forces that are supporting the Assad regime.
If international events like these boil over, crude oil prices might explode, prompting some investors to take bullish positions in the crude oil market, pushing crude oil nearly to $47 per barrel by the end of the week.