In China's domestic hog market, the “Golden October” month is now drawing to a close. The market has fallen into a “quagmire” and remains sluggish, with hog prices gradually retreating. Prices for “Brother Pig” have now fallen back to “Grandma's house,” hitting a new low in nearly 4 months. The traditional peak consumption season has not brought a peak in hog prices. Moreover, losses from hog fattening have deepened. According to Mysteel data monitoring last week, the average loss per self-bred and self-raised hog being fattened in China was 252.96 yuan. Producers have fallen into a “cold winter,” and expectations of a hog price increase have strengthened!
According to data monitoring and analysis, as of 10/26, the national average price for slaughter-ready lean hogs was 9.33 yuan/kg, down 0.03 yuan from the previous day. Hog prices fell under pressure. Compared with 10.25 yuan/kg at the start of the month, prices dropped nearly 9% during the month, and were down 21.5% year on year! However, by region, hog prices suddenly rose in many areas on 10/26, and the rate of decline narrowed further. What is the market outlook, and could hog prices turn a corner? An analysis follows:
Citing data monitoring, the hog market saw both gains and declines across the 7 key production regions in northern and southern China and 28 provinces and municipalities under monitoring. Prices rose in Henan, Beijing-Tianjin, Inner Mongolia, Hebei, Heilongjiang, Liaoning, and Xinjiang, with hog quotes up 0.05 yuan/kg. Prices fell in Anhui, Jiangsu, Fujian, Hainan, Shanxi, Jilin, Shaanxi-Gansu, and Yunnan-Guizhou, with hog quotes down 0.05~0.4 yuan/kg. The declines in Hainan and Gansu were particularly pronounced!
National hog quotes were 8.55~10.8 yuan/kg. In Xinjiang, Chongqing, Guizhou, and Guangxi, quotes for standard-weight hogs fell below 9 yuan/kg. Quotes in Fujian and Guangdong fell below 11 yuan/kg, while prices in Zhejiang and Jiangsu stabilized at 9.65~9.9 yuan/kg! Domestic hog quotes have now generally entered the “9-yuan era”……
Feedback on demand indicates that overnight, in Beijing and Shanghai—traditional consumption centers in China—white-strip pork quotes in Beijing rose by 0.2 yuan. Market trading was average. Although temperatures fell, demand was only average. In Shanghai, mainstream white-strip pork quotes were around 12.4 yuan/kg. Market trading was average, and supplies of white-strip pork to wholesale markets decreased. At present, urban demand for pork in China has no clear growth; purchases are mainly driven by immediate needs. In domestic sales markets, pork trading at rural fairs was also average. Although seasonal demand is in its peak season, consumption substitution and changes in dietary structure mean that pork consumption has no clear growth. The marginal contribution of consumption offers little support to hog prices!
Moreover, with frozen pork inventories high, frozen products are gradually being released onto the domestic market in the fourth quarter, leaving the outlook for pork supply ample. Traders are generally holding prices steady and reducing volumes, while slaughterhouses, lacking sufficient marginal support from demand and facing a narrower live-to-dressed price spread, are generally inclined to press prices down.
On the supply side, yesterday, group-owned pig companies in the north and south showed divergent shipment patterns. Shipments decreased in central China, but increased among leading pig companies in the northwest, east, and southwest! At present, leading mainstream pig companies are shipping normally, and large-scale pig farms have little willingness to reduce shipments to drive prices up. In particular, as the weather turns cooler this month, pigs are gaining weight faster during fattening. The average shipment weight of sampled pig companies rose to 124.49 kilograms last week, further increasing pressure on pork supply. Producers have strong demand to recoup funds and are highly willing to sell. At the end of the month, leading pig companies still face shipment pressure! After all, according to industry research, shipments from large-scale pig companies increased month on month this month. In addition, as biosecurity risks in pig fattening increase, independent pig farms are actively willing to sell; changes in the structure of the live pig inventory and a narrowing price spread between standard-weight and heavier pigs mean there is little willingness to hold pigs back. Supply-side pressure remains considerable!
Based on this analysis, amid changes in supply and demand, current price support for live pigs is insufficient, and the market is maintaining a fluctuating trend at the bottom! Although the end of the month is approaching, slaughterhouses in the north and south may gradually complete their monthly shipment plans. At month-end, group-owned pig companies may reduce shipment volumes, which could provide some support for pig prices! However, given the ample supply and the likelihood that marginal demand support will not bring any substantial positive factors, the live pig market remains in a bottoming phase. A seasonal rise still depends on further changes in the supply-demand balance!
According to data monitoring and analysis, as of 10/26, the national average price for slaughter-ready lean hogs was 9.33 yuan/kg, down 0.03 yuan from the previous day. Hog prices fell under pressure. Compared with 10.25 yuan/kg at the start of the month, prices dropped nearly 9% during the month, and were down 21.5% year on year! However, by region, hog prices suddenly rose in many areas on 10/26, and the rate of decline narrowed further. What is the market outlook, and could hog prices turn a corner? An analysis follows:
Citing data monitoring, the hog market saw both gains and declines across the 7 key production regions in northern and southern China and 28 provinces and municipalities under monitoring. Prices rose in Henan, Beijing-Tianjin, Inner Mongolia, Hebei, Heilongjiang, Liaoning, and Xinjiang, with hog quotes up 0.05 yuan/kg. Prices fell in Anhui, Jiangsu, Fujian, Hainan, Shanxi, Jilin, Shaanxi-Gansu, and Yunnan-Guizhou, with hog quotes down 0.05~0.4 yuan/kg. The declines in Hainan and Gansu were particularly pronounced!
National hog quotes were 8.55~10.8 yuan/kg. In Xinjiang, Chongqing, Guizhou, and Guangxi, quotes for standard-weight hogs fell below 9 yuan/kg. Quotes in Fujian and Guangdong fell below 11 yuan/kg, while prices in Zhejiang and Jiangsu stabilized at 9.65~9.9 yuan/kg! Domestic hog quotes have now generally entered the “9-yuan era”……
Feedback on demand indicates that overnight, in Beijing and Shanghai—traditional consumption centers in China—white-strip pork quotes in Beijing rose by 0.2 yuan. Market trading was average. Although temperatures fell, demand was only average. In Shanghai, mainstream white-strip pork quotes were around 12.4 yuan/kg. Market trading was average, and supplies of white-strip pork to wholesale markets decreased. At present, urban demand for pork in China has no clear growth; purchases are mainly driven by immediate needs. In domestic sales markets, pork trading at rural fairs was also average. Although seasonal demand is in its peak season, consumption substitution and changes in dietary structure mean that pork consumption has no clear growth. The marginal contribution of consumption offers little support to hog prices!
Moreover, with frozen pork inventories high, frozen products are gradually being released onto the domestic market in the fourth quarter, leaving the outlook for pork supply ample. Traders are generally holding prices steady and reducing volumes, while slaughterhouses, lacking sufficient marginal support from demand and facing a narrower live-to-dressed price spread, are generally inclined to press prices down.
On the supply side, yesterday, group-owned pig companies in the north and south showed divergent shipment patterns. Shipments decreased in central China, but increased among leading pig companies in the northwest, east, and southwest! At present, leading mainstream pig companies are shipping normally, and large-scale pig farms have little willingness to reduce shipments to drive prices up. In particular, as the weather turns cooler this month, pigs are gaining weight faster during fattening. The average shipment weight of sampled pig companies rose to 124.49 kilograms last week, further increasing pressure on pork supply. Producers have strong demand to recoup funds and are highly willing to sell. At the end of the month, leading pig companies still face shipment pressure! After all, according to industry research, shipments from large-scale pig companies increased month on month this month. In addition, as biosecurity risks in pig fattening increase, independent pig farms are actively willing to sell; changes in the structure of the live pig inventory and a narrowing price spread between standard-weight and heavier pigs mean there is little willingness to hold pigs back. Supply-side pressure remains considerable!
Based on this analysis, amid changes in supply and demand, current price support for live pigs is insufficient, and the market is maintaining a fluctuating trend at the bottom! Although the end of the month is approaching, slaughterhouses in the north and south may gradually complete their monthly shipment plans. At month-end, group-owned pig companies may reduce shipment volumes, which could provide some support for pig prices! However, given the ample supply and the likelihood that marginal demand support will not bring any substantial positive factors, the live pig market remains in a bottoming phase. A seasonal rise still depends on further changes in the supply-demand balance!