Poultry price rise; futures mixed

Poultry prices continue to rise

Poultry prices in Hubei province are up 27% since the start of the year in central Hubei province as poultry prices in China continue to rally.

A Securities Daily article quotes a poultry farmer in Shandong province as saying “Recently, the price of chickens has been rising every day, and we have already got a lot of orders. We have completely got rid of the downturn before the Chinese New Year, and even returned to the strong demand at the end of 2019.”

The rally is mostly driven by supply side factors, as downstream demand remains weak.

Futures recap

Hog futures fell sharply on Thursday, down 2.4%. Despite the mild rises in the cash market, the futures market continues to head lower. Hog futures saw a rally in February but met stiff resistance at the 100 day moving average. After failing to breech this level, prices have sold off.

The contract seems to likely to retest the current lows at 15650 yuan per ton. Selling pressure is mostly concentrated in the front of the curve, with September and January 2024 falling only 1.17% and 0.05% respectively.

Domestic No.1 soybeans rose sharply on short covering following a long sell off. Prices rose 2.4% but open interest shrank following government stockpiling announcements.

Corn fell slightly but remains in a technical formation with funds making large bets ahead of planting.