As 11 moves into mid-month, domestic hog prices have recently fallen under pressure. During this traditional seasonal peak, prices have performed below expectations! In the traditional “Golden September and Silver October” months, the peak season failed to bring strong prices, and the price center gradually shifted downward. After entering 11, the price center continued to decline. Once quotes for standard pigs fell below 9 yuan/kg, prices continued to retreat. Previously, quotes for standard pigs of the three-way crossbreed fell to 8.52 yuan/kg, bringing hog prices to a new low in nearly 10 years. The market has seen an “overly rational” downward trend! However, prices have stopped falling over the past two days. Whether the market can turn around hinges on how the supply-demand balance develops from here!
According to monitoring data, on 11 11, the average ex-farm price of lean-type standard pigs of the three-way crossbreed nationwide was 8.53 yuan/kg, unchanged from the previous day. Hog prices were down nearly 29.2% year on year and remain near their lowest level in nearly 10 years. Farming losses have deepened, with mainstream piglets, standard pigs, and medium-to-large pigs all under pressure. The market is in a “bottoming-out” phase!
By region, across the 7 northern and southern producing regions under national key monitoring, the live hog market was broadly stable with minor fluctuations, and prices mostly seesawed between rises and falls! Among them, quotes were stronger in Central China, while the northern market was mainly steady to higher. However, hog prices continued to fluctuate downward in many southern areas, including East China, South China, and Southwest China! In traditional production and sales markets, quotes in Heilongjiang, Jilin, and Liaoning currently stand at 8.5~8.85 yuan/kg, while quotes in Sichuan and Chongqing in Southwest China are 8.1~8.4 yuan. Production and sales markets still face a degree of “inversion”!
In terms of demand, in China’s major consumer cities, Beijing and Shanghai, white-strip pork prices in Beijing were mostly consolidating, with average market trading feedback. The prevailing white-strip pork prices in Shanghai were around 11~11.2 yuan/kg, with average market trading and a slight decrease in arrivals. At present, domestic pork trading has entered its seasonal peak period. In particular, with the arrival of the Beginning of Winter solar term, many parts of northern China experienced winter temperatures overnight, temperatures dropped sharply, and the weather is gradually turning colder. Seasonal pork consumption is also expected to enter its peak period. Recently, in the domestic market, demand for pork at rural markets has improved, willingness to trade in white-strip pork has increased, and slaughterhouse orders have risen. The operating rate of sampled slaughterhouses has recovered to around 33.04%, strengthening demand support!
In terms of supply, among major leading pig enterprises across northern and southern China, yesterday, group-owned pig enterprises reduced shipments in many parts of East China, Central China, Northwest China, and Southwest China, while pig enterprises in Northeast China increased shipments. Regarding the ease of slaughterhouse procurement, in the Northeast market, livestock producers showed average willingness to ship, slaughterhouses faced relatively little difficulty in procurement, and slaughter schedules were generally well supported. In East China and Central China, the pace of hog arrivals at slaughterhouses was average, and procurement was relatively smooth. In southern markets, including Southwest China and South China, group-owned pig enterprises generally performed below expectations in completing shipment plans, and slaughterhouses frequently lowered purchase prices.
At present, shipment pace among livestock producers varies, and slaughterhouse procurement difficulty differs by region, leaving the market mainly range-bound. According to institutional research, this month, leading and larger pig enterprises have a relatively high average daily shipment plan, up by nearly 6%. During the month, amid accelerated culling of low-priced sows in the market, stronger willingness among secondary-fattening operators and smallholder pig farms to realize proceeds and sell, and slow shipments by major leading pig enterprises, pressure on supply is expected to remain relatively high in the middle and latter part of the month. Production capacity remains in a phase of being released at a high level!
Based on this analysis, the hog market currently faces both bullish and bearish factors. Supply-side pressure remains considerable, but seasonal demand is gradually recovering. Amid the tug-of-war between supply and demand, the hog market may gradually form a bottom. In particular, the seasonal peak demand period is approaching. As temperatures fall further, pork consumption is expected to increase, and hog prices may slowly recover. However, with market supply remaining ample and average slaughter weight rising, the supply side still faces considerable pressure, which may limit the scope for hog price rebounds during the curing season!
What do you think about this? Hog prices may briefly remain in a bottoming, choppy trend, with the market mainly seeing weak stability and back-and-forth fluctuations! Do you think hog prices could surge in retaliation in the coming period?