Sow herd at 15-mth high; Grain stockpiler executive under investigation; Oil futures slump

China sow herd level hits 15-mth high albeit weakening margin

The national sow herd level in China jumped to a 15-month high by the end of the 2022 calendar year even though hog breeding margins in the country shrank significantly in the final quarter of last year.

Sow herd level rose to 43.9 million heads as of the end of December last year, reaching the highest point since September 2021, data from the Ministry of Agriculture and Rural Affairs showed.

This was despite that hog breeding margins slumped to just 474 yuan per head during that month, more than halved from the previous month. It was the lowest level since June 2022.

Margins for hog breeders shrank continuously in the last two months of 2022 as hog prices slid to a six-month low of 20.93 yuan per kg in December and sow prices fell to 41.3 yuan per kg.

Stockpile director of largest grain-producing province under investigation

The director of the Heilongjiang Provincial Grain Bureau, Xin Minchao, is under investigation for “serious violations of discipline and law”. This announcement comes just days after China’s anti-corruption agency announced a renewed push to root out corruption in state-owned grain enterprises and stockpilers. 

Provincial grain bureaus are responsible for implementing the national grain stockpiling programs, including purchasing harvest grains from farmers, managing stockpiles, and then later auctioning off the grains.

Across grains and oilseeds, Heilongjiang is China’s largest agriculture-producing province, with a total output of 77.6 million tons last year. The province is also the largest producer of corn and soybeans in China.

Two previous directors of the Heilongjiang Provincial Grain Bureau have also come under investigation in the past 3 years. 

Hu Dongsheng was the director from 2009 to 2018 and was placed under investigation in October 2021. Zhu Yuwen was director from 2018 through 2019 and was investigated in April 2022. 

Corruption investigations into the last three directors of the provincial stockpiler in China’s largest grain and oilseed-producing province highlight the level of concern about corruption in the industry and potential worries surrounding grain stock levels. 

Oil futures slide on China destocking rumors

China is rumored to sell soybean oil and rapeseed oil shortly and futures for the three major types fell sharply by Thursday’s close.