Sino-Singapore Jingwei, June 7th. A few days ago, pig giants including Muyuan Co., Ltd., Wen’s Co., Ltd., etc. disclosed the production and sales data in May. From the perspective of commodity pig prices, pig prices showed a fluctuating upward trend.
Pig prices continue to recover
On the evening of the 6th, three pig companies disclosed production and sales data. Judging from the pork prices disclosed by each company, they all recovered to varying degrees.
Muyuan Co., Ltd. announced that in May, the company sold 5.863 million live pigs (including 1.280 million piglets), with a sales income of 8.409 billion yuan; the average sales price of commercial pigs was 14.87 yuan/kg, an increase of 18.39% over April. In addition, the historical record table disclosed by Muyuan shares shows that the price of commercial pigs has rebounded for two consecutive months.
Source: Muyuan Stock Announcement
Wen’s shares announced that the company will sell 1.3234 million pigs (including wooly pigs and fresh products) in May 2022, with an income of 2.502 billion yuan, and the average sales price of woolly pigs is 15.74 yuan/kg, with a month-on-month change of -7.26%, 10.56%, 18.08%, with year-on-year changes of 38.33%, 15.94%, and -13.80% respectively. Regarding the year-on-year increase in pork sales, Wen’s Co., Ltd. said that the company’s increased investment in seedlings and improved production performance.
Dabeinong announced that it sold 280,400 live pigs in May, with sales revenue of 481 million yuan. Among them, the sales revenue increased by 3.89% month-on-month and -35% year-on-year; the sales volume increased by -18.87% month-on-month and -13.14% year-on-year; the average weight of commercial fat pigs was 116.24 kg, and the average sales price was 15.41 yuan/kg.
Earlier, Jin Xinnong also disclosed relevant data.
Jinxinnong sold a total of 116,800 live pigs in May, with a total sales revenue of 131.2068 million yuan. The average price of live pigs was 20.45 yuan/kg (after excluding the effects of piglets and breeding pigs, the average price of commercial pigs was 15.61 yuan/kg). The month-on-month changes in the average price were 37.05%, 60.97% and 18.26% respectively.
A new cycle has arrived?
Based on the research and judgment of many securities companies, a new round of pig cycle has begun.
The Pacific Securities Research Report pointed out that the breeding industry is in a state of moderate losses, and it is expected that it will be difficult to get rid of the loss pattern in the third quarter. Affected by the expected increase in pig prices, the speed of industrial capacity reduction has slowed down, and it is expected that production capacity will continue to be reduced in the third quarter. Referring to history, on the basis of the reduction of breeding capacity, the upward trend of the future pig price cycle has been formed. The average market value of farming stocks is at the bottom, and the valuation margin of safety is high.
Guoyuan Securities Research Report believes that a new round of pig cycle has begun. From early October 2021 to late March 2022, the price of live pigs has deduced a “W”-shaped second dip. According to the classification standard that the lowest point of the price of live pigs is the starting point of a new cycle, the start of this cycle has been confirmed. However, the time interval between two dips in this cycle is only 5 months, which is significantly shorter than the previous two cycles. The increase in hurdles and secondary fattening in the industry may result in a short-term increase in supply. Taking into account the height and duration of breeding profitability in the previous cycle, three dips in pig prices may appear.
The Orient Securities Research Report said that the downturn in pig prices combined with the rise in grain prices, the industry has accumulated serious losses, which has dealt a great blow to farmers’ sentiments, and the number of breeding sows continues to disappear. Since July last year, the total month-on-month decline has reached 9.8% and a year-on-year decrease of 4%. As the cycle progresses, the reduction in production capacity in the early stage is gradually reflected, and the price center of pigs is expected to continue to move upward. In addition, the consumption expectations in the second half of the year are expected to improve, and the price of pigs will reverse. The strength may exceed expectations, and the cycle enters the second stage of configuration. (Sino-Singapore Jingwei APP)
(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, and you need to be cautious when entering the market.)
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