Government announces 7th round of pork auctions to calm prices

The National Development and Reform Commission (NDRC) announced the 7th round of auctions of reserve pork as hog and pork prices remain elevated. 

For the week of October 24th through the 28th, the price ratio of hogs to corn was at 9.66:1 which is above the Commission’s warning level of 9:1. 

The national average price of corn was assessed at 2900 yuan per ton, which would be the upper limit of hog prices at 26 yuan per KG. 

Cash prices have fallen over the past two weeks. After peaking at 28.59 yuan per KG, prices have fallen 6.2% to 26.83 yuan per KG on Wednesday, putting the price ratio of hogs to corn at 9.19:1.

In the futures market, corn prices have remained elevated and stable while hog prices have retreated. Dalian hog futures for January delivery have fallen 11.8% from their October 14th peak and broken below previous lows and the 100-day moving average which previously had served as a support level. 

The current hog-to-corn price ratio for January futures is currently at 7.5:1.

The NDRC also urged local governments to increase their efforts to release pork reserves in coordination with the national government in order to push prices lower.