Trading Front Patchy, Like Weather

by 5m Editor
29 April 2013, at 8:29am

UK - Rather like the weather a slightly unsettled day on the trading front and although the DAPP put on a decent 1.52p to rise to 160.71p followed up by Tulip and Gills also going up a penny, Cranswick, Karro and Woodhead all decided to stand-on with the result that the shout price table now reads, writes Peter Crichton.

The price table reads as follows:

Woodhead 164p
Gills 162p
Tulip 161p
Karro 160p
Cranswick 159p.

Although spot bacon buyers were commenting that demand still remains patchy with legs hard to clear, they were all short of stock with the result that spot bacon was generally traded between 163p–165p/kg according to spec, but the supply/demand equation was summed up by one buyer's comment of "can't buy 'em, can't sell 'em".

A weakening in the value of the euro also did nothing to help as far as the pigmeat import/export balance is concerned and news that cull sow prices have plummeted by 5p/kg on the week further underlines poor manufacturing grade pigmeat prices throughout mainland Europe and beyond.

A further significant reduction in the value of the euro also did nothing to help as far as cull sow prices are concerned with the euro trading on Friday afternoon at 84.14p compared with 85.69p a week earlier and as a result cull sow abattoirs were generally offering in the 103p–105p/kg range compared with 127p/kg a year ago when the euro was worth even less at 81.6p.

On the basis that when Europe sneezes we catch a cold, lower European pigmeat prices will inevitably impact on the British market at a time when a price recovery is sorely needed and although British pig prices are very close to record highs, they are still well out of step when compared with production costs which have also continued to soar.

Another common factor across Europe is that the cost of funding large quantities of pigmeat in store is putting some major continental meat processors under significant financial pressure at a time when additional funding is hard to secure.

The weaner market is however painting a slightly brighter picture mainly due to a lack of supply rather than any long term belief that lower feed prices and higher finished pig values are around the corner with the latest AHDB 30kg ex-farm weaner average quoted at £49.17/head, but Freedom Food pigs continuing to earn useful premiums of £2-£4 ahead of this.

Although grain futures prices have remained largely unchanged over the week with May wheat quoted at £192.75/t and November at £182.50/t, ex-farm wheat prices are holding firm at £191/t and soya also remains an expensive commodity.

Forecasts of better weather in the US and the re-emergence of Russia and the Ukraine on the wheat export markets have helped weaken prices a little, but feed prices are still well out of step with pig values and this situation needs to change soon or yet more producers will be forced to head for the exit door.