DCA Stock price 2.0 cannot avoid correction

The reduction that the North/West Commission made on Wednesday, March 7, in the VEZG quotation (-€0,06 to €1,49) was not sufficient for the large slaughterhouses in Germany. According to the ISN (the German interest group), Tönnies and Westfleisch have willingly followed the bad example that Vion Germany set last week. Both slaughterhouses now charge a 'hauspreise' of €1,47 (-€0,08) and €1,46 (-€0,07) respectively. Vion Germany, on the other hand, has not fallen further (€1,50 per kilo).

(Text continues below the chart)The second 'hauspreise' of 2018 at Tönnies is a fact. 

Internet stock market stable
The increased pig supply in Germany means that slaughterhouses can put extra pressure on the market. The reduced slaughter pace, in combination with the willingness to give up pigs, means that there is still plenty of supply in Germany. However, the Internet stock market did not drop any further on Friday, March 9, and remained at the level of last Tuesday (€1,51 per kilo). 9 of the 12 parties were deducted, a signal that the market may have found some support again.

Yet there is unrest in Germany. It is a realistic scenario that the German pork price will return to slaughterhouse levels next week. The Nord/West sow price also did this this week. This corrected by €0,03 to €1,06 per kilo, after Tönnies did not go along with the increase 7 days earlier (week 9/10). This shows that slaughterhouses are able to impose their will when meat sales lag behind.

Mood in the Netherlands
The negative changes in Germany are not leaving the Dutch pig market cold. Slaughterhouses such as Compaxo (€1,35) and Van Rooi (€1,43) kept the quotations unchanged, but the pressure is increasing. Sentiment was especially negative on Thursday, March 8.

Some traders claim that the majority of the supply will end up reasonably well towards next week. According to slaughterhouses, the pigs are actually overshooting considerably. In addition, people are discussing disappointing meat sales in Asia (slaughter by-products) and Great Britain (bacon).

Due to the significant correction in Germany and the chance of further reductions, the DCA Exchange Price 2.0 has become too tightly positioned in the market. The quotation is therefore adjusted and decreases by €0,02 to €1,40 per kilo for slaughtered pigs. The price of live pigs also drops by €0,02 to €1,11 per kilo.