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May 18, 2009
China Livestock Market Weekly Review: Hog and broiler prices lower; corn and soymeal markets remain firm       


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Market analysis


Both hog and broiler prices dropped over the week.


Corn prices remained stable while soymeal markets were mostly higher amid stronger CBOT futures.


Meanwhile, rapeseed meal and fishmeal prices weakened whereas cottonseed meal prices stood relatively stable.

Market forecast: Hog and broiler markets seen weak

Feed prices


Corn buyers are withholding further purchases to wait for the government to fix the details of the anticipated corn auction. Consequently, corn prices are expected to remain stagnant.


On the other hand, soymeal prices will likely stay around the current range as China government continues to procure domestic soybean and CBOT soy market keeps its upbeat trends.


Livestock prices 


The price dip in the hog markets last week was the work of the seasonal weakening of pork demand as summer approached. The market's reaction to China's flu cases was more rational than when the disease first broke out in Mexico and the US, as it was more widely accepted that pork consumption would not increase the risk of infection. Moreover, the virus strain did not seem to be as deadly as initially supposed.


Nonetheless, hog prices will remain on the weak trends as pork consumption is conventionally weak during summertime. Piglet prices will likely decline further as buying interest wanes. Meanwhile, piglet supplies are seen to reduce as sow reproduction rates are usually lower in summer.


Broiler prices have weakened over the week as broiler release increased substantially. Traditionally, demand for broilers would peak in summer; however, this year, broiler consumption stayed sluggish due to the economic slowdown.


With demand fundamentally weak, broiler prices are likely to be soft in the near future.


Market monitor 


Huamu Hy-Line Layer Farm, a joint venture between Shijiazhuang Huamu Animal Husbandry Co., Ltd and US Hy-Line International, announced the completion of its layer breeding units. Located in four villages of Xingtang County, Shijianzhuang City the breeding units have an accumulated inventory of 200,000 sets of parent stock layer breeders now. With a total investment of 1.56 billion yuan, Huamu Hy-Line Layer Farm aims to build a modernised farm to raise 140,000 sets of grandparent stock breeders and 3 million sets of parent stock breeders, and to be equipped with its own feed mill, veterinary products manufacturing plants, broiler and egg processing plants, research and development centre and distribution units.

Qianyuanhao Biological Co.,Ltd (QYH) has imported 30 tonnes of H5N1 bird flu vaccines to Vietnam, China's first such export the country. The vaccine export is The World Bank's humanitarian aid to Vietnam and is wholly produced in QYH's plant in Zhengzhou.

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