China Desk: Chinese hog farms are losing money. And that reaches our soybeans
Hogs below 9 yuan/kg and farmers in the red. When pork struggles there, demand for meal (and for Brazilian soy) cools.
To save you time4
- What's happening to hogs in China?
- Prices fell to 8.95 yuan/kg on November 9 (-3.76% this month), per price portal 生意社, and farmers are losing money.
- How much are farmers losing?
- About 274 yuan per head in mid-September (Zhuochuang data); the hog-to-grain ratio is below 5:1, the government's alert zone.
- What does this have to do with Brazilian soy?
- Hogs are China's biggest soymeal consumer. Loss-making farmers cut herds and feed, cooling demand for soybeans and the premium China pays.
- Any sign of improvement?
- On the Dalian exchange, 2027 contracts trade above 12 and 13 yuan/kg. The market expects a recovery, just not now.
中文源Original Chinese sourceView original ↗
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Few people in Brazil watch this, but they should: the Chinese hog is one of the best gauges of demand for our soybeans. And it's sick.
The price
According to price portal 生意社 (100ppi), live hogs were worth 8.95 yuan/kg on November 9, down 3.76% since the 1st.
The exchange signal
On the Dalian exchange (大商所), the November contract hit 9.44 yuan/kg on October 21, and the exchange issued a risk warning over volatility, according to 21st Century Business Herald. 2027 contracts trade above 12 and 13 yuan/kg: the market expects a recovery, just further out.
Farmers in the red
In mid-September, farrow-to-finish producers were losing about 274 yuan per head (Zhuochuang data). The hog-to-grain ratio sits between 4.42 and 4.71, below the 5:1 level Beijing treats as an alert.
Why it reaches you
Feed is more than half a farmer's cost, and soymeal is the main ingredient. Loss-making farmers cut herds and adjust rations. Result: tighter crush margins in China and less willingness to pay a premium for Brazilian soybeans.
What I'd watch
Weekly hog prices and Dalian meal. The China Desk tracks both as a leading signal of soybean demand, before it shows up in port premiums.
Sources
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