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All Eyes are On the Euro...

by 5m Editor
13 February 2010, at 12:53pm

UK - Although one or two spot traders were suggesting during the week that they had too many pigs on their hooks and prices would be down, as it turned out nothing resembling the St Valentine's Day Massacre took place on the pig trading floor today and contract prices were if anything a tad firmer with the DAPP rising from 140.01p to 140.38p and the Tulip base price up by a full penny to 142p, according to Peter Crichton in this week's Traffic Lights commentary.

As a result it was difficult for spot buyers to attract many pigs away from contract because the trend seems to be for fewer and fewer pigs to be sold on the more volatile spot market plus the second cold snap is reducing growth rates, so very few pigs were left unsold on Friday night.

Spot bacon tended to be traded in the 138p–140p range, but lighter weights and gilts are attracting reasonable premiums of 4–8p/kg.

A glance in the diary however reveals a very different picture 12 months ago when the DAPP was worth 5.41p less than it is today and spot quotes were 5p higher.

After several weeks in the doldrums the cull sow market moved ahead again which a benchmark base price of circa 100p and no need for sellers to accept less than this, except for small numbers or on a collected basis.

A strong weaner market continues to reflect a combination of a shortage of numbers in the system due to infertility and losses caused on outdoor units by the recent very hard weather conditions as well as optimism over finished pig prices in three months time.

The AHDB 30kg ex-farm weaner average has now risen to 351.67/head with reports of 7kg pigs being traded in the 338/head region, but still very much a seller’s market and for those who are prepared to hold their nerve and not blink, prices ahead of this can be obtained.

One feature that may unsettle the markets in the weeks ahead are reports of the potential weakness of the euro if the Greek economy does not recover from its sickbed and other neighbouring European Union countries follow suit.

Although the euro closed on Friday worth 86.9p which is far from disaster, this time last year it was worth 89.1p and any further falls would make those dreaded imports even cheaper and could take the edge off demand for cull sows.