Wen’s Group, the second largest hog producer in China, announced that it sold 1.94 million hogs in February which is its second-highest sales on record.
Average prices during the month were 14.62 yuan per KG. This is down from October, which it saw average prices at 26.69 yuan per KG, but it is up 16.5% compared with February 2022.
Implied hog weights were 119.2 KG, which is up slightly compared to last month, but also still lower than in December.
Market sentiment among farmers remains nearly universally bullish with the expectations that prices are set for another upswing. This is raising some concerns about the viability of a major rally among analysts.
Prices were depressed last year going into March and then rallied steadily throughout the year and ended up 135% in October.
Because of this, farmers are already starting to engage in ‘secondary fattening’ and raising hogs to even higher weights in hopes of higher prices in future months. This additional supply in Q2 could limit the upside in hog prices.