July 20, 2001
CHICAGO — Pork bellies rose more than 3 percent, the biggest gain in a month, on expectations that rising demand for bacon has cut into unsold supplies.
A government report today will probably show inventories of frozen pork bellies fell below 40 million pounds last month after reaching a 44-year low at the end of May, analysts said. Bellies are up 12 percent in the past two months as more people eat bacon-lettuce-and-tomato sandwiches during the summertime.
"It's BLT season — and demand is unusually strong," said Richard Nelson, a broker with Allendale Inc. in McHenry, Ill. "The expectation is that the report tomorrow will be bullish."
Pork bellies for August delivery rose 3 cents, the exchange-imposed limit, or 3.4 percent, to 90 cents a pound on the Chicago Mercantile Exchange, the highest price since July 10 and the biggest one-day gain since June 19.
There were 46 million pounds of frozen pork bellies in storage on May 31, down from 68.3 million pounds a year earlier and the lowest level for the date since 1957, a U.S. Department of Agriculture report on June 20 showed.
Pork bellies are frozen during the winter and used to supplement fresh supplies in the summer, when the tomato crop ripens and bacon demand peaks.
The USDA's report for last month is scheduled to be released after trading today.
"Estimates range from 34.4 million to 39 million pounds," Nelson said. "Anything under 40 million is considered bullish." |
