sourcepennreelfierce3: China Grain Network
According to data from Souzhu.com, on May 23, the average price of lean pork pigs nationwide was 15pennreelfierce3.92 yuan/kg, an increase of 0.2 yuan/kg from the previous day. Quotes in the north and south generally increased significantly by around 0.15 to 0.4 yuan/kg, and the market increase showed a further expansion trend. Compared with the average price in the same period last year, the increase was 12.11%. Due to the accelerated reduction of sow production capacity in the second half of last year, there has been a significant shortage of standard pigs in the market since this month. Amid the shortage of live pigs, market bullish sentiment is high, and pig prices have bucked the trend and surged higher for several consecutive days.
Guojin Securities believes that pig production capacity has been reduced for 15 months, and pig production capacity is already at the lowest level since 2021. Based on the calculation of the number of Nengfan sows, the supply of live pigs around April began to be lower than the same period last year year-on-year, and the decline gradually expanded. It is expected that as the impact of weight reduction gradually weakens and the gap on the supply side gradually reflects, pig prices are expected to continue to rise and provide good profits in the second half of the year. Be optimistic about high-quality companies with excellent cost control and continuous expansion.
Shanxi Securities Research News pointed out that the fourth "loss bottom" of this cycle will enter in 2024, which is the first time since 2006 that there have been four "loss bottoms" cycles, and the cycle is expected to gradually come to an end. The U.S. pig industry still has an obvious pig cycle during a period of high scale. At present, the scale of my country's pig industry is still significantly lower than that of the United States, and my country's pig prices will continue to show cyclical fluctuations in the future. Due to the existence of industry behaviors such as secondary fattening, people tend to believe that the high point of the pig cycle in the future is more likely to be higher than the normal cycle high before the occurrence of "African swine fever" in 2018.
Caitong Securities expects that pig prices will fluctuate upwards in May (supply pressure will begin to ease, and demand will improve month-on-month); production capacity may still be reduced (corporate cash flow pressure will increase significantly, and there is a lack of a replenishment window); and the price cycle will be reversed gradually, and it is still recommended to allocate pig breeding at the bottom. Related targets: Muyuan Shares, Wenshi Shares, New Wufeng, Superstar Agriculture and Animal Husbandry, etc.
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