A Spluttering Trade

by 5m Editor
1 August 2009, at 7:54am

UK - Spot sellers found out who their friends were (and were not) today with some of the warmer-hearted buyers prepared to hold prices at similar levels to last week, but others determined to clip 2–4p off last week’s falling quotes, writes Peter Crichton.

The sputtering spot trade has finally filtered through to the DAPP which for almost the first time since the start of the year took a downward step and is now quoted at 155.08p compared with 155.57p.

With Tulip, Vion and Cranswick all keeping producers tied to contract numbers and in certain cases cutting these back by 10 percent, more pigs became available onto a generally lacklustre spot market where demand for loins in particular has been hit by the lack of good barbecue weather and stocks are starting to build up.

The leg trade on the other hand (pardon the pun) is reported to be reasonably firm, although imports remain a threat with the euro easing in value trading on Friday at 85.5p compared with 86.4p a week ago.

Ladbrokes have stopped taking bets on when the first processor refers to the end of August “short week“, but it is only a matter of time before that is brought into play as well!

As a result of all these factors spot bacon was generally traded in the 142–146p range according to specification, but those producers selling on DAPP-related contracts are advised to keep these locked away in a safe place until the autumn.

The sow market is also showing signs of slight weakening, although by the end of Friday most bids were at generally reluctant stand on levels and 114p remains a realistic average with the usual premiums available for larger loads and numbers still on the tight side.

Weaner prices are also starting to see the effect of easier spot prices and the AHDB 30kg ex-farm average has lost a little more ground and now stands at 356.16/head, although with difficult harvesting weather and feed wheat now quoted on an ex-farm basis at little more than 390/t, opportunities are available for buyers with strong nerves (and bank accounts) to earn a useful margin selling weaners bought today in the autumn when demand normally improves.

No reports yet of any “cheap“ weaners mingling with tourists at the Channel ferry ports, but repeating last week’s theme most responsible pig finishers will realise that the risks greatly outweigh the rewards, and let’s hope it stays that way.