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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated September 30, 2020

What are Pork Bellies?

Pork Bellies are a major commodity traded on the Chicago Mercantile Exchange.

How Do Pork Bellies Work?

Pork bellies are a commodity of pork products traded as a futures contract on the Chicago Mercantile Exchange since 1961. The unit of the commodity is 20 tons of frozen, trimmed bellies. Pork bellies are able to be flash frozen after slaughter and held for a long time in storage. The prices of the futures contracts for pork bellies depend on the inventory and the season demand for pork products, which can be quite predictable.  

Why Do Pork Bellies Matter?

Because of the cyclical nature of the demand for pork products in a variety of strong U.S. and international markets, the purchase (and sale) of pork bellies futures can be a reliable investment strategy.  It is very similar to the way natural gas futures tend to rise right before winter, when traders expect the demand for heat (for homes and businesses) to increase.

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