In mid-11 month, the domestic live hog market saw weak and steady fluctuations this week. After the price of standard pigs of the three-way crossbreed reached 8.52 yuan/kg, prices mainly moved sideways over the past two days. Market sentiment improved slightly, with bearish sentiment gradually weakening and bullish confidence strengthening!
According to data monitoring, this week, the quoted price for domestic piglets weighing 7 kg was 70 yuan/head. Farming losses deepened, and the culling of sows in the market remained relatively widespread. As for hog shipments, the average shipment weight this week was 125.87 kg, up 0.65 kg from the previous week. Meanwhile, the average weight of hogs after slaughter was 94.77 kg, up 0.12 kg week on week! The rise in live hog shipment weight further strengthened pork supply. However, slaughterhouse profitability improved this week: the average processing profit per head at sampled slaughterhouses rose to 5.2 yuan/head. Downstream demand showed greater willingness to take up supply, and the slaughterhouse operating rate increased to around 33.4%!
At present, bullish and bearish factors coexist in the live hog market, and market sentiment is gradually improving! In terms of supply and demand fundamentals, pressure on the supply side remains substantial!
On the one hand, supply plans from the broader market and large-scale pig producers are relatively high, increasing supply capacity. In particular, shipments from group pig producers are up nearly 2.56% month on month. Production capacity is being released at a high level this month, while the average weight of pigs shipped is rising, further strengthening supply capacity.
On the other hand, domestic frozen pork inventories remain high. Frozen pork inventories this week are 30.76%, down 0.47 percentage points from last week. Increased shipments of frozen pork are further adding to the market supply of pork. In addition, disease outbreaks in the live pig market have been frequent recently, and farming losses have been difficult to reduce. Producers in the broader market and large-scale pig companies still have a rigid need to sell pigs to recover funds!
However, although supply pressure from both live pigs and pork persists, support from the demand side is also gradually improving! Seasonal demand has now entered its peak period. In particular, after the Beginning of Winter, pork consumption among northern residents is gradually increasing, and household demand is gradually strengthening. Pork prices are also relatively low, improving value for money and boosting buying and selling sentiment in the end market. Fresh pork sales are improving, slaughterhouse order volumes are recovering, and operating rates are gradually rebounding!
Based on this analysis, amid the tug-of-war between supply and demand, market sentiment is strengthening expectations of price increases. With seasonal demand recovering, domestic pig prices are expected to see a bottoming-out recovery! According to institutional research, on 11 month 14, the quoted price for live pigs of the three-way crossbreed is 8.63 yuan/kg. Market buying and selling trends will remain worth watching!