Crops used for animal feed, such as corn and soybeans, may benefit from consumers switching from pork to beef following the swine flu outbreak, according to Eugen Weinberg, analyst at Commerzbank.
With consumers expected to reduce pork consumption in the short term for fear of contracting swine flu – despite the World Health Organization’s reassurances that the flu cannot be caught by eating pork – pig prices are likely to come under pressure. "Cattle fattening is more feed intensive than pig fattening," said Weinberg.
However, "the link between swine flu outbreak in humans and feedgrain consumption is tenuous and largely psychological," said Lewis Hagedorn, commodities analyst at JPMorgan. "For now, we assume a short-term focus on bearish demand psychology in the grain and oilseed markets but a limited further decline in prices," he said.
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