African Swine Fever Presses Pigs Lower

So far, North American pig farms have been free of African swine fever (ASF). No longer. It has been found in the Dominican Republic. Some think it’s not a matter of “if” ASF comes to the U.S. but “when” because the virus is highly contagious. It doesn’t infect people, but people can unknowingly spread it. Ticks, infected feed and other contact with the virus are how it’s transmitted.

The U.S. banned pork from the Dominican Republic in the early 1980s in response to a different swine fever strain. That ban remains in place. China and Europe have been dealing with ASF for a few years and have taken drastic measures to stop it. Hogs for August delivery closed around $1.09 per pound on Friday.

Gold Goes Down as Dollar Goes Up

Precious metals took it on the chin Friday morning as the U.S. Department of Labor announced a jump in new jobs (943,000) and a half-percent decline in the unemployment rate. The implied strength in our economy confirms thoughts the Fed will have less incentive to keep interest rates down, subsequently increasing the cost of holding metals. Gold tumbled nearly $50 per ounce on the news. December gold traded at $1,758 per ounce midday Friday.

Crude Tanks on COVID Concerns

Worldwide concerns about the delta variant tanked liquid energy prices more than other commodities. With feelings of deja vu, demand destruction in the travel industry, trips to school, work, meetings and concerts are being curtailed or, at least, threatened by the so-called fourth wave. September crude oil was $68.40 per barrel midday Friday.

Nat Gas Rises with Hot Temps

Unlike liquid fuels linked to transportation demand, natural gas prices buoyed sharply higher on demand from electric power plants in the Northeast, which use that commodity to drive turbines to generate power for air conditioning. In addition, temps on the East Coast climbed higher than predicted, and hydropower plants are running on reduced water levels.

The tragic fires in California have worsened, breaking records for property damage and acres destroyed. Although not directly impacting natural gas usage, the drought out west and the heat surge in our central plains continue to remind us of how our bizarre weather swings could affect future markets. September natural gas traded at $4.17 on Friday, nearly double the price from last year at this time.