December 1, 2011
China Livestock Market Weekly Review: Hog price fall eases; AA broiler prices range bound
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Market analysis
Over the week, hog prices dropped at a slower pace amid smaller releases, while AA broiler prices moved within a narrow range after previous week's rise.
Offer prices for new-crop corn by deep processors were lower as shrinking profits prompted them to reduce production. However, traders and feed millers continued to stockpile inventories, hence lending some support to the corn market.
Although CBOT soy futures prices remained weak, buyers stocked soymeal inventories, albeit cautiously, believing that there was little scope for prices to move lower. Hence, soymeal prices showed signs of stabilising over the week.
Market forecasts
Feed prices
Corn price falls have slowed down since late October. However, in the near term, corn prices will continue to stay weak due to plentiful supplies and slow demand.
The unstable global market, which results in weak CBOT soy futures prices, as well as the cautious mood of buyers, will continue to limit the upward potential of soymeal market in China.
Livestock prices 
Weekly pork sales stayed flat, limiting the demand for hog in China. Nonetheless, hog prices, which were more than 15% lower compared with late September, dropped at a slower pace, as release volume had shrunk considerably of late.
AA broiler prices moved within a narrow range after previous week's rise. In Liaoning, where availability was tight, slaughterhouses offered higher prices to secure supplies. As broiler farmers expanded inventories in preparation for the pre-Chinese New Year demand during January, day-old chick prices strengthened further.
Supplies of hog have tightened in several major hog producing provinces. With pork demand expected to rise in the coming weeks, hog prices are likely to move up gradually.
Slaughterhouses and meat processors will continue to accumulate stocks in anticipation of higher chicken demand in December and January. Prices of broiler are therefore seen stable or higher in the week ahead.
Market monitor
    1. Shalong Livestock Co Ltd and Guangzhou-based Haiyuan Food Co Ltd joined hands in a marbled pork processing base in Ningxiang county, Changsha city of Hunan. The RMB1.18-billion joint venture will include hog slaughtering, meat product processing and R&D. Haiyuan Food also agreed to purchase Ningxiang marbled white-carcass pork valued at RMB1 billion from Shalong Livestock.

    2. As part of its expansion efforts, Fujian Sunner Group aims to set up a RMB2.7-billion integrated broiler base at an undisclosed location, incorporating a breeder broiler farm, a broiler farm, a hatchery, a meat processing plant, a feed mill and a distribution centre. Upon completion, the base will add 120 million broilers to Sunner Group's expanding capacity of over 200 million birds, cementing its status as China's largest self-raised AA broiler producer. 

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