November 8, 2011
China Livestock Market Weekly Review: Massive releases hammer hog market; broiler prices gain sharply
An eFeedLink Exclusive
Over the week, massive liquidation of hogs by farmers amid disease fears and price volatility continued to hammer the hog market, while AA broiler prices gained sharply as slaughterhouses hiked prices to compete for short supplies and to stimulate farmers' replenishment interest.
A bumper corn harvest and expectations of rising imports weighed on China's corn market. Meanwhile, heavy rains and fog in northern producing regions of Shandong, Henan and Jiangsu hampered corn delivery and trading, sending corn prices there higher.
CBOT soy futures stumbled early in the week in a global commodities rout led by a stronger dollar, and as favourable weather aided South American soy planting progress. On top of external pressures, flat domestic feed demand and heavy soy stocks totalling over 6.5 million tonnes at major ports drove China's soymeal prices lower to around RMB2,980-3,300/tonne over the week.
In the near term, corn market is seen on weak momentum amid growing supplies. However, there is a likelihood that the government may intervene by buying corn in the market to refill state reserves anytime soon.
USDA's upcoming November crop report, which is likely to show a bearish soy forecast amid sluggish US export demand and the prospect of a larger South American crop, may exert further pressure on China's soymeal market.
Pork demand continued to improve slightly with weekly pork sales up 0.68% to reach 8,934 tonnes. Massive liquidation of hogs by farmers in the midst of disease fears and price volatility continued to hammer the hog market. Over the week, prices in northern regions showed larger declines to align with prices in the south.
AA broiler prices gained sharply from last week, as slaughterhouses hiked prices to compete for short market supplies and to stimulate farmers' replenishment for the year-end high demand season. Day-old chick prices surged strongly over the week with both integrators and farmers stepping up their purchases.
In the coming week, hog prices may begin to stabilise amid dwindling hog herd as well as a pickup in pork consumption as the weather turns colder. AA broiler market is set to remain firm on tight supplies.
Wens Group has recently signed an agreement to build a 2.3-millon-head integrated hog farm in Zhongjiang, Deyang city of Sichuan.
With a total investment of RMB550 million, Zhengbang Group plans to establish a 500,000-head hog base and a 240,000-tonne feed processing mill in Anfu county, Ji'an city, Jiangsu. Upon completion, the three-phase project is expected to generate around RMB600-800 million in annual output values and RMB125 million in profit.
- Henan Chun Tian Livestock Technology Development recently imported 557 grandparent-stock breeder hogs of Landrace, Large White and Duroc breeds from England worth a combined US$9 million.
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