fishinggloves| Pig prices have risen more than expected. What do you think of it?

editor2024-05-27 18:20:019Business

Source: animal husbandry in China

The near futureFishingglovesSpot prices of live pigs continue to rise, and pig prices in some parts of the country have risen to more than 16 yuan / kg. At the same time, pig futures prices are rising, and the latest prices are up more than 16% from their pre-Spring Festival lows.

According to data released by the National Bureau of Statistics, in mid-May 2024, compared with the first ten days of May, the price of live pigs is 15.Fishinggloves.3 yuan / kg, the highest since early October 2023, up 0.3 yuan / kg, or 2%, from the previous month. Since the beginning of this year, pig prices have shown a volatile trend, with the latest price up 11.68% from the low of the year. In addition, pig futures have also risen slightly since May, with the main contract up more than 5% since May.

With the impact of production capacity and supply adjustment, the pig industry has a positive attitude towards the future market. Especially in the northern region, due to the reduction of production capacity, farmers have begun secondary fattening, further aggravating the shortage of supply in the pig market, resulting in high pig prices. Recently, with the stability of pork prices, the amount of replenishment has increased, while large-scale farming enterprises have maintained a relatively low volume, these factors may promote pig prices to continue to strengthen in the short term.

fishinggloves| Pig prices have risen more than expected. What do you think of it?

On May 27, the trading price of Sanyuan live pigs rose slightly to 16.70 yuan / kg. Expert analysis, the recent pig market due to capacity reduction led to tight supply, especially in the northern region, the fence action at the breeding end pushed up the price stability. Affected by this, the secondary fattening and fattening activities increased, at the same time, due to the limited availability of bid pigs in breeding enterprises, pig prices may remain strong in the short term. It is expected that as the effect of capacity removal appears, as well as the decline in breeding costs, the pig farming industry is expected to remain profitable in the next 3-5 months.

Recently, the pig market has picked up to a certain extent, the fundamental reason is that the gradual realization of production capacity in the second half of 2023 led to a reduction in pig supply. In addition, the market is optimistic about the pig market in the second half of the year, which also attracts some breeding groups to engage in secondary fattening operation, diverting part of the market supply.

At present, the situation of periodic oversupply in the market will be gradually improved. On the supply side, the effect of pre-production capacity reduction will gradually become apparent in the second and third quarters of this year. On the demand side, according to the seasonal consumption pattern, pork consumption in May and June is usually 5% to 10% higher than in March and April, which helps to support the rise in pig prices.

Shenwan Hongyuan Securities said that from the supply side, the trend inflection point of pig supply contraction has arrived, and the third or fourth quarter has gradually entered the pork consumption season, the demand side is expected to gradually improve. Judging from the timing and extent of the capacity reduction, the current round of production capacity of breeding sows began to decline in January 2023 and periodically declined for 16 months in April 2024, with a cumulative reduction of 9.2%. As the process of this round of pig production capacity reduction is relatively smooth, the acceleration time mainly occurs at the beginning of 23Q4 and 24Q1, supply-side fundamentals or unsupported pig prices jump continuously, it is expected that the enthusiasm of secondary fattening entry may be difficult to repeat 2022. Pig prices are expected to rise month by month from May to the second half of the first peak consumption season in September.

With the continuous updating of market data, the pig farming industry is ushering in a long-lost wave of warming. According to the latest data, profits from breeding self-raised pigs jumped to 58.21 yuan per head on May 24, the first correction since September 8 last year, marking that the pig farming industry has officially got rid of the shadow of long-standing losses. The profit of purchasing piglets is as high as 204.15 yuan per head, the highest since 2023.

Guotai Junan Research News pointed out that according to the data of the Ministry of Agriculture and Village in April, production capacity continued to be eliminated for 16 consecutive months, and the continuity of capacity removal promoted the gradual improvement of pig prices in 2024, and the contradiction between supply and demand began to appear in the second quarter of 2024. Looking back, the cost variance and high asset-liability ratio make the growth rate of production capacity slow or sow production capacity will continue to be eliminated after the price rise. At present, the extent of capacity removal that has been accumulated has been large, and the basis of capacity removal in a new cycle is sufficient.

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