Prices fell—pork prices are stuck in a “quagmire”! Silver October is now nearing its end. During this traditional peak consumption season, pork prices have fallen instead of rising, and the average price of live pigs has gradually approached the post-Spring Festival low, with market trends exceeding expectations. According to data, domestic prices for standard pigs fell to 9.08 yuan per kilogram. Pork prices declined by more than 11% during the month, and by more than 18% compared with the beginning of last month, the starting point of Golden September and Silver October. The live pig market is sluggish, with prices continuing to trend weakly at low levels. Confidence in a market rebound is lacking, while bearish and wait-and-see sentiment is strong in the short term!
At present, bearish factors dominate the live hog market, which lacks effective support. Although the number of breeding sows at the end of the third quarter fell 10.7% year on year to 3602 ten thousand head, which is positive for the outlook for hog prices next year, live hog supply remains in a phase of continued release, and the mismatch between production and sales is becoming more pronounced!
According to monitoring by the cited institution and statistics from Zhuochuang Data, monthly hog shipments by large-scale hog enterprises in 10 increased by 2.45% month on month. In the first ten days of the month, holiday-related factors slowed shipments from large-scale hog enterprises. After the National Day holiday, however, losses from hog fattening deepened, and disease outbreaks at pig farms in the south became more frequent. Independent pig farms were eager to sell, while farms that had previously entered the market on a rolling basis for secondary fattening were also actively selling medium and large hogs. This further weighed on shipment performance by large-scale hog enterprises! Shipments by large-scale hog enterprises were relatively slow this month. Earlier, according to monitoring by SteelHome, statistics for 21 in 10 showed that the monthly completion rate for hog shipments in producing regions was 61.96%, below expectations. In the latter part of 10, leading hog enterprises in many areas of both northern and southern China were still increasing shipments, and hog supply in circulation was ample.
Moreover, the average weight of pigs recently shipped for slaughter has increased, further strengthening pork supply capacity. In addition, since the fourth quarter, slaughterhouses have increased shipments from their frozen pork inventories as they rotate stock, adding to the supply of frozen pork. This has further limited sales of fresh pork on the market and dampened the recovery in slaughterhouse operating rates. During the month, operating rates at the sampled slaughterhouses remained low. Although falling temperatures have recently brought a slight recovery in domestic market demand, the increase in demand has been limited, and the operating rate at sampled slaughterhouses is below 31%!
Based on this analysis, pressure on the supply side continues to ease, while support from the demand side remains weak. Ample supply and weak demand remain the prevailing trend, and pig prices are continuing to languish! According to institutional research, following price adjustments by slaughterhouses, the estimated live pig selling price on 10 month 31 is 9.07 yuan/kg. Going forward, attention will be paid to changes in the pace of market buying and selling, particularly changes in the pace of sales by large-scale pig farming companies!