Spot market "firm", weaner market shows signs of life

UK - Weekly Trafic Lights price commentary by Peter Crichton
calendar icon 19 November 2006
clock icon 3 minute read
Demand for spot pigs was best described by one trader today as “firm but not spectacular“ with all spare pigs finding homes relatively easily and those buyers looking for numbers prepared to put a copper or two on top of last weeks quotes whereas others were operating at stand on levels.

Spot bacon was generally traded in the 110 – 112p region with cutters worth not much more and inspite of rising feed prices, no great incentive for producers to sell lightweights even though there is a tendency for some sellers to bring pigs forward to miss the Christmas holiday period which is now only four trading weeks away.

The GB Euro DAPP has also maintained almost similar levels at 107.4p with a result that contract prices which are generally paid at 2 – 4p above the DAPP were almost identical to spot quotes.

This has helped to keep the supply of spot pigs on the tight side and helped to maintain demand.

The slide in EU mainland pig prices seem to have bottomed out although they have dropped from circa 110p in early September to the equivalent of 91p today.

Pre-Christmas UK pigmeat prices are probably at or close to their peak, but the hope throughout the trade is that we will avoid the usual Christmas/New Year slump now that numbers are much lower.

According to the MLC the average UK pig kill for the last three weeks is 158,000 head which may sound a lot of pigs, but is almost 50% down on the late 1990’s.

Lack of numbers has also helped demand for cull sows to remain firm with the MLC reporting a UK weekly average of 4,076 head slaughtered which based on a 40% replacement rate means the entire UK productive sow herd is little more than 500,000 head.

Cull sow quotes for deliveries next week have moved slightly firmer nudging up towards the 80p mark and the € has thankfully avoided any further falls over the last seven days closing on Friday worth 67.7p.

The weaner market is also showing signs of life after a long static period although the MLC 30kg ex farm average has yet to reflect this and remains at £33.92/head.

Feed prices are still the main talking point with ex farm feed wheat and barley prices nudging above £90/t compared with £64/t a year ago with some delivered prices touching £100/t.

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Those who would like to read a longer version of my weekly commentary please visit the FWi site. Commentary prepared on Friday, usually appears on the the following Monday/Tuesday - Peter Crichton
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