Securities Times reporter Zhao Liyun
March came to an end, and the domestic pig market continued to decline as a whole under the constraint of weak demand.
Recently, the market's enthusiasm for African swine fever has increased again, but the reporter of the Securities Times e Company learned from listed companies and analysts in the industry that the overall impact of the current epidemic on production capacity is not obvious, and it is difficult to change the pattern of oversupply in the market.
Speculation is difficult to change, and the market is weak
Domestic pig prices continue to be sluggish, coupled with the frequent occurrence of animal epidemics around the Spring Festival, the impact of African swine fever epidemic on production capacity has attracted attention, and the capital market has also staged the pig sector speculation.
"According to past experience, the cold winter season in the north and the rainy season in the south are the seasons with high incidence of pig diseases. From November last year to March this year, the impact of the epidemic in the northern region was indeed more obvious year-on-year, but the impact on the industry as a whole has not yet appeared. First, the production capacity focuses on the layout of pig breeding enterprises in the southern region.
According to an industry insider, although there is news in the market recently about the impact of market capacity caused by the non-epidemic epidemic, from the perspective of the company itself, there is no obvious feeling. "In recent years, the non-epidemic epidemic has become regular, and the prevention and control measures and experience of enterprises are sufficient, and the overall impact of the epidemic is controllable."
Guo Dandan, an analyst at Shanghai Steel Union, also said that non-plague does have an impact on the production capacity of pigs in the north, and the loss of commercial pig inventory in some areas is as high as 20%-30%, or a gap is formed in May and June. However, the supply in the south continues to increase, making up for the supply of some markets, and will not have a particularly significant impact on supply.
"According to the inference of the pig growth cycle, the current pig inventory corresponds to a month-on-month increase of 2022.5% in May 0, and the market is still in a situation of oversupply." Zhuochuang analyst Shao Wei mentioned that the price of piglets in some markets has exceeded the 92 yuan mark recently, the enthusiasm of the market to replenish the fence is high, coupled with the increase in secondary fattening behavior, the terminal demand is not followed up in time, and the breeding end is still facing huge financial risk pressure and challenges in the future.
Recently, the Ministry of Agriculture and Rural Affairs issued the Notice on Doing a Good Job in the Prevention and Control of Animal Diseases in Spring, deploying to strengthen the normalization of the prevention and control of major animal diseases such as African swine fever and the prevention and control of the sources of key zoonotic diseases, and maintain the safety of animal husbandry production, public health safety and national biosecurity.
Hog futures fell more than 12% during the month
On March 3, the main contract of hog futures 29 reached an intraday low of 2305 yuan / ton, down more than 15095% from the high of 17345 yuan / ton at the beginning of the month.
In terms of the spot market, Souzhu.com data shows that as of March 3, the average price of lean pigs in the country has fallen below 28 yuan / kg to 15.14 yuan / kg, which is close to 9 yuan / kg in early March, and has fallen by 3 yuan / kg.
Pig prices fell overall, and breeding profits shrank again.
According to the latest data from the National Development and Reform Commission, affected by the continuous decline in pig prices, the pig-to-food ratio in the domestic market has fallen to 5.26:1 last week, continuing to be below the break-even point of 6:1.
"The current loss value of the farm is about 100-200 yuan / head." Guo Dandan, an analyst at Shanghai Steel Union, said that the recent pig market supply is relatively sufficient, first of all, the weight of retail investors is large, generally 130-150 kg, increasing production capacity supply. In addition, the supply of the scale farm itself has increased, and the enthusiasm of retail investors has also increased, so the supply side is sufficient. In terms of demand, it is currently in the off-season of consumption, and the enthusiasm of enterprises to freeze products is not high, so the operating rate basically maintains a narrow range. Supply is greater than demand, and pig price volatility weakens.
Souzhu.com data also shows that the average loss of heads under the current national self-breeding and self-raising conditions is still more than 200 yuan / head, which is still a moderate loss.
The market is looking forward to the second quarter
Although the weakness of pig prices is obvious, the strength of piglet prices still shows the market's optimistic expectations for the future market.
Guo Dandan believes that the market supply and demand continued to be unbalanced in April, and pig prices still declined, but the decline was not large. It is expected that the pig supply gap in May and June may initially appear, and pig prices may rise due to the emotional situation.
Wang Yanan, an industry researcher, said that from the demand side, the demand growth space in April is small, and only the end of the month or there is a short May Day holiday stocking, and the support for the market is weak. Secondly, from the supply side, some markets are still expected to increase the amount of production in the first half of the year, and the market may decline again on the basis of the price at the end of March. In the middle and late months, after the completion of some pig sources, the pace of pigs out of slaughter or slows down, the impact of accelerating the slaughter in advance may appear at that time, the number of pigs that can be slaughtered may be slightly reduced than expected, which is beneficial to the market, and the price stops falling and rises. On the whole, pig prices in April may show a trend of first falling and then rising, and the inflection point may appear in mid-to-early April.
Previously, Wenshi said in the announcement that from the trend of pig prices over the years, the first quarter after the Spring Festival is the traditional off-season for meat consumption, and pig prices around the Spring Festival are generally low, which is caused by seasonal factors and is in line with the law of previous years.
Historically, pig prices have generally recovered gradually from April as the weather warms. Recently, pig prices have moved out of the trend of stopping the decline and stabilizing. From the trend point of view, it is expected that pig prices should have a good performance in the second and third quarters. According to experience, pig prices may remain at a good level in October, and after October, pig prices are more likely to show a slow decline.