January 8, the industry eagerly awaited hog futures in the Dalian Commodity Exchange officially listed on the market. After the opening of the main contract diving constantly.
Industry insiders said that the September contract will become the main contract, the contract benchmark price of 30,680 yuan / ton, from the valuation point of view, the price is relatively high. As of the midday close, the main hog contract 2109 fell as much as 10.01 percent to close at 27,610 yuan per ton. The far-month 2111 contract fell 14.57 percent to close at 25,355 yuan per ton.
Data show that on January 8, 2021, the pig price market is cold, the national foreign three yuan pig price remained at 36.43 yuan/kg, pig prices fell 0.19 yuan/kg. Hog prices rose to a halt, ushered in the "2 consecutive decline", and in the country can monitor the 26 provinces and cities pig prices have fallen, now, the Lunar New Year is approaching, hog futures listing, 2021 farmers and how to choose?
At the same time, with the continued recovery of hog production capacity, the long cycle to see pig prices in the downward channel; although the hog market consumption in 2021 will pick up, but compared with the normal level of previous years is still weak, is expected to fall back to the second half of the price to 24-30 yuan / kg, the price of hogs in September, or much lower than the current market price.
By this impact, the A-share pork plate weakened, as of press time, Jinxinong (002548.sz) fell 4.7%, the new Wufeng (600975.sh) fell 4.8%, Zhengbang science and technology (002157.sz) fell 5.53%, Tangren Shen (002567.sz) fell 4.92%.
Futures listing price near high far low, farming enterprises strong willingness to hedge
Long, China is the world's largest hog producer and consumer countries, breeding scale accounted for 43% of the world's market capitalization of about 2 trillion, involving thousands of households, thousands of factories and enterprises. Since then, the "pig cycle" plagued the hog farming, trade, processing enterprises, especially in recent years, by the African swine fever and the new crown epidemic and other impacts, the price of hogs fluctuations, the industry hedging strong demand.
He Xintian, secretary-general of the China Animal Husbandry Association, said that the pig industry is the pillar industry of China's agricultural and rural economy, and at present, China is a large pig consuming country, but it is not yet a strong pig producer, and it has long been threatened by major animal diseases, and it faces severe natural and market risks.In 2018, the occurrence of African swine fever has had a serious impact on the pig industry, which has a direct influence on the economic and social stability.
While the hog industry is facing big market and natural risks, there are still many small and medium-sized enterprises, which have exposed a lot of problems in disease prevention and control capabilities, and biosecurity protection. Even for large-scale pig enterprises, they have high investment and high risk. Once there are cyclical fluctuations in production, the enterprises will face severe difficulties.
The listing of hog futures will help provide new business means and tools for enterprises to be able to rationally use futures tools to plan their production well. "We hope that enterprises in the hog industry and related enterprises can actively and rationally participate in the listing of hog futures, reasonably use futures tools to control the risks of hog production, and maintain production stability and effective market supply."
Industry insiders said that for hog futures, both market investors, or want to participate in hedging farming enterprises, the forward hog price trends are very concerned. The listing price, showing a clear discount structure, near high and far low, long-term bearish hog price trend is obvious. Qin Yinglin, chairman of the board of directors of Makin Group, said that the listing of hog futures is the need for the development of the hog industry.
At the same time, the listing of hog futures also marks the development of the hog industry has entered the advanced stage of marketization. Hog futures professionals into the hog industry, can early find the value, prejudge the price, guide the production, alleviate the pain of the enterprise hog cycle, avoid the production and business risks, so that more pig farmers benefit, for the pig industry to make contributions to the orderly and stable development. It can also stabilize market supply and benefit more consumers.
On January 7, the national average price of outer three yuan hogs was 36.68 yuan/kg. This spot price is significantly higher compared to the futures listing price of 30,680 yuan/ton in September. And in December 2020, the selling price of Makin's commercial hogs was 30.15 yuan/kg. Guotai Junan hog industry researcher Zhou Xiaoqiu believes that the September contract will become the main contract, the contract benchmark price of 30,680 yuan / ton, from the perspective of valuation, the price is relatively high. It is expected that the annual average price of hogs at the benchmark in 2021 will be 25 yuan/kg, and the willingness to hedge will be very strong for farming enterprises.
Chihuahua data CEO Huang Jinwen told the "China Times" reporter that the new futures varieties who have no experience, subjective prediction of the listing price does not fully reflect the market information. After the opening, it is not uncommon for the transaction price generated by the long and short game to deviate significantly from the listing price. A similar situation occurs in the securities market, where the trading price of a stock on its first day of trading is often significantly different from the IPO price. Therefore, there is no need to over-interpret this point.
According to the spot market data collected by Chihuahua Data, today, the spot price of hogs in Henan Province is 17.7-18.1 yuan per catty, corresponding to the futures price of 34,200-36,200.The current spot price truly reflects the contradiction between the strong demand before the Chinese New Year and the gap in hog supply. This year, the hog cycle has entered a downward channel, and the scale of expansion of hog farming enterprises is quite large. Hog supply will recover substantially by September, while the summer is the off-season for pork consumption. Current futures prices objectively reflect this information.
New varieties on the market generally have great price fluctuations, and the risk of speculative trading is not small. Huang Jinwen suggested that enterprises in the hog industry make full use of futures tools to hedge the risk of pig prices. Industry hedging transactions, farming enterprises are suitable for shorting, hedge against the risk of falling prices of hog sales, lock sales revenue and profits; meat processing enterprises are suitable for long, hedge against the risk of rising pork procurement prices, control the cost of raw materials.
Hog production capacity recovery of more than 90%, pig prices 2021 trend downward
Because of the close relationship between the price of pork and the level of consumer prices, do a good job of stabilizing the production of hogs to ensure the supply of the matter of national economy and people's livelihood. The reporter was informed that the Ministry of Agriculture and Rural Development has completed this year's pig inventory target task ahead of schedule. As of the end of November 2020, the national stock of live pigs and breeding sows have been restored to more than 90% of the perennial level, there are 23 provinces have completed the capacity restoration task ahead of schedule target, the national stock of live pigs will be restored to the first half of 2021 at the latest, to the perennial level.
The relevant person in charge of the Ministry of Agriculture and Rural Affairs said that, at present, the effectiveness of the national hog production recovery has exceeded expectations. A large number of high-level large-scale pig farms are rising rapidly, and it is expected that the annual pig farming scale rate can reach about 57% in 2020, which is 4 percentage points higher than that of 2019, and much higher than the rate of 2 percentage points in the normal year.
According to monitoring data from the Ministry of Agriculture and Rural Development (MARD), from August to November 2020, the nation's hog farrowing increased both sequentially and year-on-year. However, from January to November 2020, designated slaughtering enterprises slaughtered a cumulative total of 141.98 million hogs, down 19.6 percent year-on-year. Although supply has yet to fully return to perennial levels, the central reserve meat placement has increased significantly.
In 2020, only October and November did not put frozen pork, and the year's cumulative total of 38 times, a total of 670,000 tons of frozen pork. Among them, 20,066 tons were put on December 30, and 11,241 tons were traded. 2021 January 7, another 20,000 tons of frozen pork were put on the market. Recently by the seasonal rebound in consumption, frozen goods circulation is blocked and other factors, the national pork prices rose significantly.
From the weekly price point of view, the prices of hogs and pork market prices began to pick up from the fourth week of November and the first week of December 2020, respectively, and have been rising for six and five consecutive weeks, respectively.
In the last week of December 2020, the national average price of live hogs per kilogram was 34.8 yuan, a cumulative increase of 17.8%, up 3% year-on-year; the price of pork was 51.65 yuan per kilogram, a cumulative rise of 12.8%, a slight increase of 0.8% year-on-year.
However, according to the reporter's understanding, the recent rise in pork prices, in addition to consumer expectations to enhance the factors that lead to price increases, imports of pork is also one of the main factors, from the point of view of the import cycle, and foreign procurement agreements to frozen products into the port, the time cycle of 2-3 months, the frozen products import traders more will be based on the future price of pork prices to determine the procurement plan.
In general, 80% -90% of imported meat into the small and medium-sized food service channels, a small number of other channels, and this year China is affected by the new crown epidemic, the high price of fresh meat so that the frozen products of the residents of the consumption channels to enhance the proportion. But the end of the year frozen products are frequently exposed to carry the new crown virus, the national policy tightened, frozen products circulation difficulties, fresh products consumption share back up again, which is also one of the reasons for the price of hogs rose at the end of 2020.
For pork prices in 2021, Chihuahua data research director Yuan Song, however, told the "Huaxia Times" reporter that it is now a downward pig cycle, and the general trend in 2021 is still downward. However, taking into account the current pig price is still high, indicating that the contradiction between supply and demand is still relatively tense, the gap in supply is still relatively large, so 2021 is still a year to fill the gap. The probability of pig prices are still mainly above the cost line, and from the trend of the 2020 sow inventory, the second half of the faster growth, that on the supply of 2021, the second half of the year than the first half of the growth, the pressure on pig prices is also greater.
For farmers, it is time to start thinking about costs and benefits. The future of farming profits return to normal levels, and then can not operate according to the idea of not counting the cost, as long as the feed on the line. For the cost of sows, production performance, farm operation and management, need to do more detailed. 2021 overall still have room for profit, but the cost of expansion is not appropriate.