The pig consumption season is coming to an end, and the price is becoming more difficult |


Original title: The pig consumption season is coming to a close

1. Market review

The hog futures were basically in line with market expectations in the first month of listing. The volatility fell below 25,000, and then the volatility rebounded. The spot price was once firm and upward. Due to the peak season of terminal demand, the early hog prices gradually increased, and the consumer terminal gradually decreased as the weather warmed. With the demand for high-priced meat, the southern curing season is almost over. The sales of white strips in slaughterhouses have slowed down, and even losses have occurred, which has lowered the price of upstream pigs. On the other hand, in the initial stage of listing, the price of live pig futures fell successively. Market investors’ expectations for the long-term month became consistent. Spot premiums continued to increase, making it more difficult for spot prices to rise. When the price fell to the 25,000 yuan/ton mark, a short cycle The moving averages have begun to stick together, and the market’s long and short forces have tended to be balanced. It is expected that the live pig futures will likely show a trend of shock adjustment in the short term.

Figure 1: Daily K-line chart of hog index

Data source: Wenhua Finance

2. Macroeconomics: China’s annual GDP has achieved positive growth and online consumption highlights

According to preliminary calculations, the annual gross domestic product was 101,5986 billion yuan, an increase of 2.3% over the previous year at comparable prices. In quarterly terms, the first quarter was down 6.8% year-on-year, the second quarter was up 3.2%, the third quarter was up 4.9%, and the fourth quarter was up 6.5%. In terms of industries, the added value of the primary industry was 7775.4 billion yuan, an increase of 3.0% over the previous year; the added value of the secondary industry was 3,84255 billion yuan, an increase of 2.6%; and the added value of the tertiary industry was 5539777 billion yuan, an increase of 2.1%.

In 2020, the total retail sales of consumer goods will be 39.2 trillion yuan, and final consumption will account for 54.3% of GDP. Consumption is still the “ballast stone” for the stable operation of the economy. Among them, car sales have ranked first in the world for 12 consecutive years. In 2020, my country’s online consumption will continue to grow rapidly. In 2020, my country’s Internet life service online sales revenue, logistics express service sales revenue, and digital cultural service sales revenue will increase by 56.1%, 26.8%, and 31.1% respectively. In 2020, my country’s import and export of goods was 32.2 trillion yuan, an increase of 1.9%, and both the total scale and the international market share reached record highs. In 2020, my country’s utilization of foreign capital will grow against the trend. The actual utilization of foreign capital for the whole year is nearly 1 trillion yuan, a year-on-year increase of 6.2%, making China the world’s largest foreign capital inflow country.

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Three, market supply and demand

(1) The stocks of live pigs and turnable sows have steadily recovered and are expected to return to normal levels after the third quarter

Compared with 19 years, the number of live pigs in my country has increased significantly. At the end of 2020, the number of live pigs nationwide will reach 46.5 million, an increase of 96.1 million heads compared with 2019, a year-on-year increase of 31%. In addition, the stock of reproductive sows has also increased significantly. In 2020, the national stock of reproductive sows will be approximately 41.61 million, which is an increase of about 10 million from the end of 2019.

Figure 2: The stock trend of live pigs and reproductive sows, and the year-on-year chart of stocks

Data source: WIND, Guangzhou Futures

Data source: WIND, Guangzhou Futures

(2) Prices of breeding sows and piglets

1) The stock of reproductive sows has rebounded significantly, and the proportion of ternary pigs has slightly decreased

Data from the National Bureau of Statistics show that the national reproductive sow population in 2020 will increase by 35.1% over the end of the previous year. Therefore, it is estimated that the national reproductive sow population will be 41.61 million by the end of 2020. The growth rate of hog stock is much higher than the growth rate of slaughter pigs. There is a problem of capacity exchange. May-July 2020 is the period with the highest proportion of ternary sows that can breed pigs. The number of sows has turned positive year-on-year, and the current proportion of ternary sows that are converted to breeding is still relatively high, and the production capacity elimination rate of sows will be higher in the next six months.

Figure 3: The price of domestic dual reproductive sows

Data source: My agricultural products (000061, shares), Guangzhou Futures

2) The piglet price rebounds in the short term, but the price increase is limited

As of January 31, 2021 (the fourth week), the national average price of 15 catties of piglets was about 1,423 yuan/head, an increase of 2.81% compared to the previous week, and a decrease of 15.38% year-on-year. Affected by diarrhea, kou hoof disease, swine fever, etc. The current piglet survival rate is significantly reduced, the intention of breeding farms to replenish the slaughter is high, the piglet market is active, and the current pig farming profits are considerable, and the farmers are willing to raise prices for slaughter, boosting the price of piglets to continue to rise.

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Figure 4: Domestic piglet prices

Data source: My agricultural products, Guangzhou futures

(3) Spot supply and demand of live pigs

1) At the end of the peak consumption season, the group’s sales continued to increase

As of January 22, 2021, the average price of live pigs in my country’s 22 provinces and cities was 35.94 yuan/kg. As of January 13, the pig-to-food ratio was 12.83:1. At present, the recovery of live pig production across the country is generally improving. After entering the peak consumption season, the breeding end has increased willingness to raise prices, and the phenomenon of slaughtering pigs for fattening is more common. The slaughter end has reduced prices due to losses. Due to the recurrence of the new crown epidemic, the flow of people during the Spring Festival It is expected to decrease and aggregate consumer demand will decline, putting pressure on meat prices.

Figure 5: Price comparison between domestic live pig prices and pig food

Data source: Wind, Guangzhou Futures

2) The quarterly production of live pigs has rebounded sharply, and the large-scale production capacity has continued to expand

Since 2020, under the dual effects of market stimulus and policy incentives, the recovery of live pig production has continued to accelerate, the African swine fever epidemic has been effectively controlled, and the supply of live pigs in the market has continued to improve. In 2020, 522.04 million heads of live pigs will be slaughtered nationwide, 17.15 million heads less than the previous year, a decrease of 3.2%. It is expected that the slaughter of live pigs from January to February this year will increase by about 25% over the same period of the previous year, and the relationship between supply and demand will become more relaxed in the later period. According to the statistics of 13 listed pig companies in 2020, Muyuan 18.115 million heads, Zhengbang 9.559 million heads, Wen’s 9.545 million heads, New Hope 8.2925 million heads, Tianbang 3.0778 million heads, Dabeinong (002385, shares) 1.8504 million heads , Aonong 1,346,300, Tiankang 1,345,400, Tang Renshen (002567, shares) 1,024,400, Jin Xinnong (002548, shares) 803,600, Longda 318,500, Luo Niushan (000735, shares) 153,900 , Zhenghong Technology (000702, shares) 71,900 heads. In 2020, 13 listed pig companies will produce a total of 55,504,500 pigs for slaughter. Calculated on the basis of the national slaughter volume of 522.04 million heads in 2020, only these 13 pig companies account for the national slaughter 10.53% of the amount.

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Figure 6: The number of pigs sold in a single quarter

Data source: Wind

4. Disc analysis of feed-related varieties

As of January 29, domesticcornThe index is 2709, and the open interest is 1.572 million hands. It has shown a trend of rising and falling in the past month. The long-term trend is still in the long-term pattern. The short-term average is down, and the 60-day average may provide support.domesticSoybean mealIndex, as of January 29, the soybean meal index was 3485, and the open interest was 2.346 million lots. The trend in the month basically fluctuated downward. The previous period greatly deviated from the support average line. Fundamental or news information support is required. Short-term longs are more cautious. .

Figure 7: Dalian Corn Index and Positions

Data source: Wenhua Finance

Figure 8: Dalian soybean meal index and positions

Data source: Wenhua Finance

Five, market forecast

On the whole, the first month of hog futures listing was relatively stable, and spot prices gradually fell after a short-term surge. Terminal demand was still more sensitive to price marginal reactions during peak seasons, and consumption of substitutes also improved. Beef and mutton prices also gradually climbed. The sales of white striped pigs slowed down, and the willingness to sell pigs at the breeding end increased near the Spring Festival, and the slaughter end reduced prices to increase profits. At present, the occurrence of African swine fever in China is mainly scattered, and many small and medium-sized free-range households have retryed to start production. In the second half of December, the affected areas of African swine fever in the country did not spread significantly, and the overall situation was stable compared with the first half of the month. The major breeding provinces of Henan and Hunan provinces affect 10% of the area. Shanxi, Shaanxi and Xinjiang are still the least affected by the epidemic. It is expected that in the short term, the main contract of live pig futures will likely show a trend of shock adjustment. for reference only.

Figure 9: Hourly K-line chart of the main contract for live pigs

Data source: Wenhua Finance

Guangzhou Futures Liu Yuhui

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