Peter Crichton’s commentary for May 23, 2014

With supply and demand almost exactly in balance, despite yet another short week ahead (but the last until the end of August) prices have remained on a relatively even keel, with contract-based quotes moving slightly ahead reflecting a 0.22p/kg rise in the DAPP, which now stands at 164.23p.

The gap between the DAPP and the APP a week ago is 1.81p ahead in favour of the APP price, which (surprise surprise) is based on prices submitted by sellers rather than buyers!

Spot-bacon buyers were generally operating at stand-on levels within a fairly narrow 165-167p/kg range, but with some of the smaller abattoirs closing on Bank Holiday Monday, there was to some extent subdued spot demand.

Cull sow prices are still reflecting the pressure put on the market by the ongoing Russian ASF related pigmeat import ban, as well as reports of indifferent demand with plenty of stock in cold stores and, as a result, cull sow quotes have remained stuck at last week’s level with most quotes in the 89-92p/kg range, not helped by further rises in the value of the pound, which means that on Friday afternoon the euro was only worth 80.94p.

Weaner prices have also hit something of a plateau, although they could soon rise once the effects of lower cereal prices start to filter through the system, with the latest AHDB 30kg ex-farm weaner average quoted at £56.21/head and 7kg piglets at £41.09/head, but as previously useful premiums are still available for well-matched large bunches of tail-docked and fully vaccinated weaners in both weight ranges.

Although wheat futures prices perked up on Friday, trading with May quoted at £153/t, November quotes are still relatively attractive at £146.75/t and some reports are being received of harvest time offers in the region of £140/t being available on an ex-farm basis.

GB wheat production forecasts are currently looking strong and providing we don’t see any extremes on the weather front between now and harvest, crop yields should be relatively high. At the same time, the USDA is forecasting potential record maize and soya bean crops in 2014/15, which should help to maintain downward pressure on worldwide soft commodity markets.

Soyabean prices fell by £4/t on Friday to £363/t ex-UK East Coast stores, and nearby futures prices have also eased, all of which should hopefully help to put a spring in the step of the pig sector as we enter the summer.

And finally, with a confirmed dysentery outbreak notified in Suffolk, producers, hauliers and abattoir operators are all urged to keep foot dips topped up and disinfectant procedures very much to the fore. Also, please spare a thought for the producer concerned and the disastrous personal and financial effect this has had on his lifetime’s work, building up an award-winning herd over the years, only to see the whole lot go for slaughter.

Forewarned is forearmed!

> Based in Suffolk, Peter Crichton provides a wide range of valuation, auction and livestock marketing services, as well as supplying the UK pig industry with a wide range of consultancy services covering tenancy, contract advice, pig equipment and herd valuations as well as dispute resolution. For more information visit: www.petercrichton.co.uk

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