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November 1, 2011
 
China Livestock Market Weekly Review: Hog market resumes slide; broiler prices inch up on supply drop
 
An eFeedLink Exclusive
 
 
Market analysis
 
During the week in review, hog prices especially those in southern regions declined further due to rapid sell-offs of diseased hogs, while AA broilers prices lifted slightly as market supplies tightened.
 
Corn prices resumed slides in most regions, but sales had been slow as farmers were not eager to sell their new crops amid anticipation for higher prices as well as their preoccupation with autumn harvesting. Large-scale feed millers and ethanol makers were actively procuring in the market while most corn processors remained on the sidelines, along with some cash-strapped traders.
 
Commodities market received a boost from the EU's proposal to resolve the debt crisis, which helped rebuild investor confidence. Consequently, China's soymeal prices strengthened as crushers were less willing to negotiate prices. However, the price increment was limited as soy supplies remained abundant while feed demand stayed weak with feed millers taking a prudent stance.
 
 
Market forecasts
 
Feed prices
 
Corn prices are poised to slip further under seasonal harvest pressure, but the downside will be limited as demand remains firm, while farmers continue to withhold stocks.
 
In the coming week, cautious mood, abundant soy supplies and slow livestock inventory growth after the early October holidays will weigh on soymeal market, limiting its scope to move higher.
 
Livestock prices 
 
Wholesale pork consumption rose a moderate 2.35% to 8,873 tonnes as pork prices dropped further over the week. Hog prices continued to push lower, with those in southern regions suffering larger declines due to rapid sell-off of diseased hogs. 
 
Despite slow chicken product sales, slaughterhouses lifted purchase prices for AA broilers to maintain their operations after broiler supplies tapered down slightly. Farmers were not motivated to replenish due to weaker broiler market and steep rearing costs. Over the week, day-old chick trading was mainly supported by restocking from large integrators.
 
Large-scale hog releases over disease concerns may continue into the coming week, casting a prolonged dark cloud over the hog market. Meanwhile, AA broiler prices are poised to slowly recover in the near term, underpinned by current supply shortfall. 
 
 
Market monitor  
  1. Sunsing Livestock & Poultry Co Ltd recently commenced construction on its RMB75-million breeder hog base recently in Pudong, Shanghai, listed as one of the 30 national core hog breeding centres in China. Scheduled to complete in 20 months, the 280-mu facility will include a 1,200-head GPS breeder hog farm capable of producing 20,000 pure breeder hogs and commercial hogs each year, as well as a 1,600-head parent-stock breeder hog unit, which is set to output 30,000 native dual-breed sows and commercial hogs annually.         
  2. Zhengbang Group has started work on a 500,000-head integrated hog base in Hong'an, Huanggang city of Hubei. The RMB800-million base, which operations span across breeder and commercial hog rearing, feed processing and traceability-enabled meat manufacturing, is expected to reap RMB2.5 billion in annual sales once production is in full swing.

  3. Senlong Group Huatai Animal Husbandry Co Ltd began constructing a 100,000-head hog farm in Yiyang county, Henan's Luoyang city. Annual output values are estimated at RMB210 million for the 1,000-mu site. Another hog farm of similar capacity invested by Guangdong Wanhe Animal Husbandry Co Ltd will also be built in Yiyang county. Occupying 450 mu in area, this RMB120-million farm will take two years to complete. 


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