There’s still no signs of any real recovery in pig prices, with the SPP dropping by 0.43p/kg to 132.58p, and spot buyers describing demand as “quiet”.
However, most contract numbers were taken in full and as a result there were very few spare pigs being offered on the spot market, which is probably a good thing in the view of limited demand.
Contract base prices tied the SPP will continue to ease, and what’s really needed is an improvement in spot demand to feed through to the SPP, there is still little sign of this happening at present.
August can however be a fickle month towards the end of the summer holiday period, but with Brits returning home demand normally starts to improve as September approaches.
One bright spot has been a slightly stronger euro, which traded on Friday worth 71.28p compared with 70.42p a week ago.
As a result, although EU Mainland pig meat prices have remained flat and the German pig quote dropped one cent, the currency change helped to move cull sow prices up by circa 1p in some cases, although others stood on and most quotes were in the 50-53p/kg region according to load size.
Demand for weaners remains lacklustre with the latest AHDB 7kg weaner average at £33.20/head and 304kg weaners just over £10 dearer at £43.99/head.
With buyers still preoccupied with harvest as well as no real signs of improving finished pig prices, this trend is likely to be repeated in the weeks ahead.
Feed prices are however painting a slightly brighter picture for under pressure pig producers with spot ex-farm quotes for feed wheat this week dropping towards £100/t, and futures prices are also in retreat with November quoted at £117.75/t and March 2016 at £122.40/t.
Improving weather conditions in the US and reports of increases in global wheat production levels, including higher tonnages in Russia and Ukraine at a time when worldwide demand has remained unchanged, added to bearish trends in cereal markets.
Reports of higher production levels of soya beans in the US, which have overshot earlier targets by three million tonnes, may also help to keep protein prices under control and the global view appears to be that relatively low feed prices may be here for the foreseeable future.