Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Views - The increase in the live hog 2601 contract price is a game between long - term inflection point expectations and short - term fundamentals. It's a pre - pricing of future supply - demand repair rather than a direct reflection of current fundamentals. One should closely monitor the speed of capacity reduction and the pace of consumption recovery, not over - chase the rise, and treat it as a short - term long position [3]. - The A - share market is expected to continue to fluctuate upward at a high level tomorrow [6]. - For gold, due to its large short - term fluctuations, it's advisable to avoid short - term long positions [10]. - For iron ore, the terminal situation has not actually improved after the holiday, iron water may decline periodically. If it breaks below the important support again, a large adjustment may occur. In the long - term, supply is expected to be loose with the commissioning of the Simandou project [14][15]. - For glass, daily melting changes little, inventory has continued to accumulate this week. The follow - up drive mainly lies in policy - side stimulus and anti - involution policies for the supply side. The market is currently in a pessimistic atmosphere [18][19]. - For eggs, the inventory of laying hens is increasing, and egg supply is sufficient, suppressing the price rebound. But considering the current price and cost, there is a short - term long opportunity [21]. - For pulp, the price in Shandong is stable today. China's cumulative pulp imports from January to September were 2706 tons, a year - on - year increase of 5.6%. Domestic port inventories remain high, and it is expected to run weakly, to be treated as low - level fluctuations [25]. 3. Summary by Related Catalogs Hot Focus - Live Hog 2601 Contract - The market shows a "near - weak, far - strong" pattern, and the 2601 contract has become the focus of capital game due to its anti - decline characteristics [3]. - The upward momentum comes from three aspects: capacity reduction expectations (the elimination rate of retail investors has risen to 8% in September), policy support signals (central reserve purchase and storage), and seasonal logic (anticipation of the consumption peak season before the 2026 Spring Festival) [3]. - There are short - term pressures: the current live hog inventory is 440 million, the proportion of large - weight hogs has reached a new high this year, the spot average price is only 10.72 yuan/kg, and the supply - demand pattern of oversupply remains unchanged. The bearish sentiment is dominant in the technical aspect, and the sustainability of the rise is to be tested [3]. Technical Analysis - Stock Index Futures - The three major A - share indexes opened higher and moved higher today, with the Shanghai Composite Index closing with a mid -阳线. The trading volume increased compared with yesterday. It is expected to continue to fluctuate upward at a high level tomorrow [6]. Technical Analysis - Gold - Gold has large short - term fluctuations, and it's advisable to avoid short - term long positions [10]. Technical Analysis - Iron Ore - After the holiday, the terminal situation has not improved, and iron water may decline periodically. If it breaks below the important support again, a large adjustment may occur [14]. - In the short - term, there are long - term agreement negotiations and accident interferences on the supply side. In the long - term, the supply is expected to be loose with the commissioning of the Simandou project [15]. Technical Analysis - Glass - Daily melting changes little, inventory has continued to accumulate this week. The follow - up drive mainly lies in policy - side stimulus and anti - involution policies for the supply side. The market has broken below important support recently, and the pessimistic atmosphere is strong [18][19]. Technical Analysis - Eggs - The inventory of laying hens is increasing, and egg supply is sufficient, suppressing the price rebound. Based on the current price and cost, each laying hen is expected to lose 16.90 yuan in the future, presenting a short - term long opportunity [21]. Technical Analysis - Pulp - The pulp price in Shandong is stable today. China's cumulative pulp imports from January to September were 2706 tons, a year - on - year increase of 5.6%. Domestic port inventories remain high, and it is expected to run weakly, to be treated as low - level fluctuations [25].

Core Viewpoint - The livestock sector is experiencing a surge due to three main factors: low pig prices, African swine fever (ASF) outbreaks, and regulatory policies aimed at capacity reduction. Group 1: Low Pig Prices - The core pressure for capacity reduction is the low pig prices, with the average cost of production around 13 yuan/kg, leading to losses of approximately 250–300 yuan per fattening pig since September 15 [1] - As of late October, the national average pig price is about 11 yuan/kg, marking the lowest point in six years for the same period [1] - The collapse of the piglet market is evident, with prices for 6–7 kg piglets plummeting from 450–500 yuan/head in the first half of the year to 150 yuan/head, resulting in a situation of "having a price but no market" [1] - High asset-liability ratios among listed pig companies could accelerate capacity reduction if low prices persist for 3–4 months, potentially leading to continuous losses [1] Group 2: African Swine Fever (ASF) Outbreaks - The winter season (October to January) poses significant challenges for ASF control, as the virus thrives in colder conditions [2] - Current risks include unusually high antibody positivity rates, worsening weather conditions that facilitate virus spread, and lax biosecurity measures by farmers due to low pig prices [2] Group 3: Regulatory Policies - A series of policies have been introduced to actively regulate production capacity, including a directive for the top 25 enterprises to reduce breeding sows by 1 million by January 2026 [3] - Additional measures include controlling the weight of pigs at around 120 kg to combat secondary fattening and a projected 10% reduction in output for major companies by 2026, which is expected to decrease national output by 5% [3] - Supporting measures involve strict environmental controls, tightening of credit, and reduction of subsidies [4] - The policy goal is to accelerate capacity reduction through administrative means to stabilize the positive impact of pork prices on the Consumer Price Index (CPI) [5] Group 4: Market Performance - As of October 21, 2025, the CSI Livestock Breeding Index (930707) rose by 0.55%, with notable increases in stocks such as Haida Group (1.81%) and Luoniushan (1.63%) [5] - The Livestock ETF (159867) increased by 0.46%, reflecting the overall performance of listed companies involved in livestock breeding, feed, and pharmaceuticals [5] - The top ten weighted stocks in the CSI Livestock Breeding Index account for 66.06% of the index, indicating a concentrated market [5]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints - The increase in the price of the live hog 2601 contract is essentially the market's early pricing of the future supply - demand repair, a game between the long - term inflection point expectation and the short - term fundamentals. It is not advisable to chase the high, and it should be treated as a short - term long position. For other commodities, different trading suggestions are given based on their respective fundamentals and technical aspects [3] 3. Summary by Related Catalogs Hot Focus - Live Hogs - The live hog 2601 contract price increase is due to the market's early pricing of future supply - demand repair. The market shows a "near - weak, far - strong" pattern, and the 2601 contract becomes the focus of capital game [3] - The upward momentum comes from three aspects: capacity reduction expectation (the elimination rate of retail investors has risen to 8% in September), policy support signals (central reserve purchases), and seasonal logic (anticipation of the consumption peak season before the Spring Festival in 2026) [3] - Short - term pressure exists as the current live hog inventory is 440 million, the proportion of large - weight hogs has reached a new high this year, the spot average price is only 10.72 yuan/kg, and the supply - demand situation remains loose. The technical side is still dominated by bears [3] Technical Analysis - Stock Index Futures - The three major A - share indexes opened higher and went higher on Monday. The Shanghai Composite Index closed with a negative doji star. It is expected to continue high - level oscillations tomorrow [7][8] Technical Analysis - Gold - The external gold market has significantly adjusted, and Shanghai gold followed with a negative close. The volatility has increased. It is not advisable to chase long positions in the short term, and it is better to buy on dips [12] Technical Analysis - Iron Ore - After the holiday, the terminal situation has not actually improved, and molten iron production may decline periodically. Technically, if it breaks below the important support again, a large - scale adjustment may be triggered [15] - There are short - term supply disruptions due to long - term agreement negotiations and accidents, but in the long run, supply is expected to be loose with the commissioning of the Simandou project [16] Technical Analysis - Glass - The daily melting volume has little change, and inventory has continued to accumulate this week. The future driving factors mainly depend on policy - side stimulus and anti - involution policies for the supply side [20] - Technically, it has continuously declined and broken below important support, and the market sentiment is pessimistic [19] Technical Analysis - Eggs - The inventory of laying hens continues to increase, and the egg supply is relatively sufficient, suppressing the price rebound. However, according to the current price and cost, each laying hen is expected to lose 16.90 yuan in the future. There are short - term long - position opportunities [23] Technical Analysis - Pulp - The pulp price in Shandong has remained stable today. China's cumulative pulp imports from January to September were 2,706 tons, a year - on - year increase of 5.6%. The domestic port inventory remains high. The pulp market is expected to remain weak and should be treated as a low - level oscillation [26]

1. Report Industry Investment Ratings - Oils and Fats: Oscillating, including soybean oil, palm oil, and rapeseed oil [5] - Protein Meals: Oscillating, covering soybean meal and rapeseed meal [5] - Corn/Starch: Oscillating [6] - Hogs: Oscillating weakly [2][8] - Natural Rubber: Oscillating [9] - Synthetic Rubber: Oscillating [11] - Cotton: Oscillating within a short - term range, with prices slightly stronger this week [12] - Sugar: Oscillating weakly [13] - Pulp: Oscillating weakly [14] - Offset Paper: Oscillating [16] - Logs: Oscillating [19] 2. Core Views of the Report - The agricultural product market shows a complex situation with different trends for various products. In the short - term, some products are affected by factors such as supply and demand, weather, and policies, while in the long - term, factors like production capacity changes and consumption trends play important roles. For example, the hog market is in a "weak reality + strong expectation" pattern, with short - term supply pressure but potential relief in the second half of 2026 [2][8]. 3. Summary by Relevant Catalogs 3.1 Oils and Fats - **View**: Continue to oscillate and consolidate, waiting for further information guidance. The market is affected by both macro and industrial factors. Macro factors include the US government "shutdown", expectations of Sino - US trade negotiations, and the Fed's interest - rate cut expectations. Industrial factors involve the suspension of US soybean data updates, expectations of lower US soybean yields, increased expected production of Brazilian new - season soybeans, and the inventory and export situations of palm oil [5]. - **Outlook**: Soybean oil, palm oil, and rapeseed oil are all expected to oscillate. The market lacks upward momentum due to factors such as the expected accumulation of Malaysian palm oil inventory, the suspension of US soybean data updates, and the smooth progress of Brazilian soybean planting [5]. 3.2 Protein Meals - **View**: Double meals are oscillating at a low level, and selling put options can be attempted. Internationally, US soybean production and exports are affected by policies, and Brazilian soybean planting is progressing smoothly. Domestically, short - term oil mill operations are increasing, and downstream inventory levels are not low. In the medium - term, Sino - US trade relations and downstream replenishment after seasonal destocking need to be monitored. In the long - term, domestic soybean meal supply is expected to be sufficient in the fourth quarter of 2025, with a possible small shortage in the first quarter of 2026 [5]. - **Outlook**: Soybean meal and rapeseed meal are expected to oscillate. The market should pay attention to the support level around 2850 - 2900, as well as weather and Sino - US trade trends. Selling out - of - the - money put options can be considered [5]. 3.3 Corn/Starch - **View**: There is a temporary shortage at ports, leading to a continuous rebound in futures and spot prices. Short - term price increases are due to factors such as bad weather, farmers' reluctance to sell, port shortages, and state - owned reserve purchases. However, the selling pressure has not been fully released, and the market is expected to be oscillating weakly in the short - term. In the long - term, the market is expected to be short - term bearish and long - term bullish [6][7]. - **Outlook**: Oscillating. If prices rebound slightly due to recent weather disturbances and inventory shortages, short - selling opportunities can be considered. In the long - term, the expectation of tight annual supply supports the idea of low - buying in the far - month contracts [7]. 3.4 Hogs - **View**: Second - fattening replenishment has diverted part of the supply pressure, leading to a rebound in hog futures and spot prices. In the short - term, consumption is in the off - season, and supply is abundant. In the medium - term, the high - level production capacity of sows in the first half of 2025 will lead to an increase in hog slaughter in the fourth quarter. In the long - term, sow production capacity is showing signs of reduction, and supply pressure is expected to ease in the second half of 2026 [8]. - **Outlook**: Oscillating weakly. Near - month contracts are under supply pressure, while far - month contracts are supported by the expectation of production capacity reduction. The hog industry presents a "weak reality + strong expectation" pattern, and attention can be paid to reverse - spread strategy opportunities [2][8]. 3.5 Natural Rubber - **View**: Return to the oscillating bottom - grinding trend. The recent divergence in the trends of light and dark rubber is due to factors such as the impact of state - reserve sales on RU and the low import volume and limited warehouse receipts of NR. The raw material price of cup rubber is relatively firm, and there are still some weather disturbances in the producing areas. The demand for tires in the fourth quarter is expected to decline [9][10]. - **Outlook**: Due to high macro uncertainty, if the overall commodity performance is poor, rubber prices are expected to continue to oscillate and find the bottom [10]. 3.6 Synthetic Rubber - **View**: The market performance is dull, with narrow - range oscillations. High production this year has been a major pressure on the market. Although downstream demand is increasing, the growth rate is lower than that of production, resulting in high social inventory. The price of butadiene, the raw material, has been fluctuating [11]. - **Outlook**: With high fundamental pressure and a lack of improvement in the raw material end, the market is expected to continue to oscillate and grind the bottom, and there is a possibility of hitting a new low for the year [11]. 3.7 Cotton - **View**: The purchase price has increased, leading to a rebound in cotton prices. The expected cotton production in Xinjiang has been adjusted downward, and the firm purchase price of seed cotton has provided cost - side support. In the short - term, the downward driving force of Zhengzhou cotton has weakened, and there is a demand for a rebound [12]. - **Outlook**: Oscillating within a short - term range, with prices slightly stronger this week. Attention should be paid to Sino - US trade negotiations, and upstream enterprises are advised to hedge actively when prices are high [12]. 3.8 Sugar - **View**: Sugar prices are oscillating at a low level, with weak supply and demand. In the medium - and long - term, the global sugar market is expected to have a surplus in the 25/26 crushing season, and sugar prices are in a bearish pattern. In the short - term, Brazilian sugar production has passed its peak, but exports have increased, and domestic sales and inventory situations are not optimistic [13]. - **Outlook**: Sugar prices are expected to oscillate weakly as a whole, and short - selling on rebounds is recommended [13]. 3.9 Pulp - **View**: Spot trading is light, and pulp prices are running at a low level. After the National Day, pulp futures have shown a bottom - oscillating trend. The supply and demand situation has not changed significantly, and the market is concerned about the high ratio of virtual to real pulp and the concentrated cancellation at the end of the year. However, the game sentiment for the 01 contract has weakened. In general, the pulp market is difficult to rise significantly [14]. - **Outlook**: Oscillating weakly. The market is dominated by warehouse receipts and weak supply - demand conditions, and the weakness of pulp futures is difficult to reverse [14][15]. 3.10 Offset Paper - **View**: With the approaching of tenders, offset paper prices may stabilize. The spot price center of offset paper remains stable, but the market is not active. The cost support is average, and the upcoming tenders have a pessimistic market expectation. Although the supply pressure has been alleviated to some extent, the increase in new production capacity in South China may restrict paper prices [16]. - **Outlook**: Oscillating. There is a possibility of a slight decline in spot prices in the short - term [16]. 3.11 Logs - **View**: Freight rates have increased, leading to the relatively strong operation of logs. The increase in port fees has raised the cost of some ships, affecting the price of logs. The market has been running weakly recently due to factors such as the negative impact of domestic timber delivery in Chongqing and the failure of the peak - season expectation. The inventory level is not low, and the demand in the real - estate market is weak [19]. - **Outlook**: In the next few weeks, due to the disturbance of increased port - fee costs, attention can be paid to the opportunity of buying on dips for the 01 contract. In the medium - term, attention should be paid to the progress of foreign merchants' replacement of involved ships and the risk of price decline after the relaxation of Sino - US policies [19].

Investment Rating - The industry rating is "Strongly Outperform the Market" [5][81]. Core Viewpoints - The pig farming sector is experiencing increased losses, leading to heightened expectations for capacity reduction, which may eventually push the long-term price center of pigs upward [2][41]. - In the beef sector, short-term prices are slightly declining, but a tightening supply is expected to lead to an upward price cycle for beef by 2026-2027 [3][46]. - The poultry sector shows stable prices for broilers, while egg prices are declining due to weakened demand post-holidays [4][51]. Summary by Sections Pig Farming - In September, 17 listed pig companies collectively sold 14.14 million pigs, a month-on-month decrease of 6.62% but a year-on-year increase of 21.94% [2][12]. - The average selling price of pigs in September was 13.11 yuan/kg, down 5.87% month-on-month and 30.76% year-on-year [17][19]. - The average weight of pigs sold in September was 128.39 kg, an increase of 0.53 kg from the previous month [17][19]. Beef Industry - The price of calves and fattened bulls as of October 16 was 32.19 yuan/kg and 25.73 yuan/kg, respectively, with year-to-date increases of 33.51% and 8.89% [3][46]. - The supply of beef is expected to tighten in the medium to long term due to significant capacity reductions from previous losses [46]. Poultry Sector - The price of white feather broilers was stable at 6.87 yuan/kg, while the price of broiler chicks was 3.29 yuan/chick, reflecting a slight increase [4][51]. - Egg prices have decreased to 5.95 yuan/kg, down 0.90 yuan/kg week-on-week, with expectations for recovery driven by capacity reduction [4][51]. Agricultural Products - The price of soybean meal was 3,010 yuan/ton as of October 17, with a slight increase of 4 yuan/ton week-on-week, but the market lacks clear bullish drivers [4][64]. - The soybean meal market is currently characterized by supply pressure and support from import costs, with expectations for a prolonged bottoming period [64].

Core Insights - The agricultural and livestock ETF (159275) showed weak performance with a price drop of 0.5% and a trading volume of 997,400 yuan, while the fund's latest scale is 207 million yuan [1] - Notable performers among constituent stocks include Hainan Rubber, Ronniu Mountain, and Zhongxing Mushroom Industry, with increases of 3.7%, 3.63%, and 3.0% respectively [1] - Conversely, Haida Group, Juxing Agriculture, and Tianma Technology experienced declines of 3.34%, 2.91%, and 2.61% respectively [1] - The Northeast Animal Husbandry Expo has been officially renamed and focuses on industry innovation and resource integration, while the 14th World Pig Industry Expo opened on October 18 in Changsha, covering 100,000 square meters and attracting over 800 global enterprises [1] - Dongguan Securities reported that pig prices have fallen to 11.17 yuan/kg, leading to continuous losses in breeding profits, with an average loss of 244.7 yuan per self-breeding pig [1] - The number of breeding sows remains high at 40.38 million, indicating significant future capacity reduction potential [1] - In poultry farming, the average price of white feather chickens is 6.87 yuan/kg, showing a slight decline, but breeding profits have marginally improved to -2.03 yuan per bird [1] - The industry valuation is at a PB of 2.85 times, which is at the historical 63.8% percentile, maintaining an "overweight" rating [1] Industry Analysis - The pig farming industry is experiencing supply pressure release, with prices continuing to decline; self-breeding and purchased piglet farming are both operating at losses of 244.70 yuan and 375.29 yuan per head respectively [2] - Under policy guidance, capacity reduction may accelerate, with a slight decrease in the number of breeding sows in September [2] - In poultry farming, the outbreak of avian influenza overseas creates uncertainty in the breeding of grandparent chickens, which is beneficial for the white feather chicken industry chain prices [2] - The demand in the animal health industry is expected to bottom out, with year-on-year changes in vaccine approvals for roundworms and pseudorabies at -17% and -11% respectively [2] - The seed industry is focusing on the progress of biological breeding expansion, the promotion of genetically modified corn, and industry mergers and acquisitions [2] - Pet food exports are minimally affected by tariff disturbances, while domestic sales continue to grow rapidly, with a 3% increase in e-commerce platform sales in September [2] - The agricultural and livestock ETF (159275) and its linked funds passively track the agricultural and livestock index, with the top ten weighted stocks including Muyuan Foods, Wens Foodstuff Group, Haida Group, New Hope Liuhe, Meihua Holdings, Dabeinong Technology, Shennong Development, Bio-Stock, Beidahuang, and Longping High-Tech [2]

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry [5][51]. Core Viewpoints - The industry has shown a slight outperformance against the CSI 300 index, with a decline of 0.45% from October 9 to October 16, 2025, which is 0.03 percentage points better than the index [5][12]. - The report highlights that the breeding capacity of sows is expected to continue to decrease, with the number of breeding sows at 40.38 million as of the end of August 2025, a slight decrease of 0.1% month-on-month [5][24]. - The report emphasizes the potential investment opportunities in leading companies in pig farming due to the expected capacity reduction and the marginal improvement in profitability for leading chicken farming companies [5][51]. Summary by Sections Market Review - The SW agriculture, forestry, animal husbandry, and fishery industry slightly outperformed the CSI 300 index, with a decline of 0.45% from October 9 to October 16, 2025, outperforming the index by approximately 0.03 percentage points [12]. - Most sub-sectors recorded positive returns, with only the breeding and feed sectors showing negative returns of 1.27% and 1.53%, respectively [13]. - Over half of the stocks in the industry recorded positive returns, with approximately 57% of stocks showing gains [14]. - The overall price-to-book (PB) ratio for the industry is approximately 2.85 times, slightly down from before the National Day holiday, indicating a relative low valuation historically [21]. Key Industry Data - **Pig Farming**: The average price of external three-yuan pigs decreased from 11.87 yuan/kg to 11.17 yuan/kg between October 3 and October 16, 2025 [24]. - **Breeding Capacity**: The number of breeding sows was 40.38 million, slightly above the normal holding capacity of 39 million, indicating potential for further capacity reduction [24]. - **Costs**: The spot price of corn was 2271.57 yuan/ton, showing a recent decline, while soybean meal prices increased to 3010 yuan/ton [26]. - **Profitability**: The profit from self-bred pigs was -244.7 yuan per head, and from purchased piglets was -375.29 yuan per head, indicating a continued decline in profitability [29]. Industry Insights - The report suggests focusing on leading companies in pig farming due to the expected capacity reduction and potential low-entry opportunities [51]. - In chicken farming, attention is drawn to the marginal improvement in profitability for leading companies [51]. - The report also highlights opportunities in the feed sector due to increasing market concentration and overseas expansion [51]. - In the animal health sector, companies with strong R&D capabilities are recommended for attention [51]. Company-Specific Insights - Key companies to watch include Muyuan Foods (002714), Wens Foodstuff Group (300498), and Shengnong Development (002299) among others, due to their strong market positions and growth potential [51][53].

Group 1 - The core viewpoint indicates that the pig farming industry is expected to undergo a comprehensive capacity reduction due to deepening losses and policy adjustments in the fourth quarter, which will lead to a gradual price recovery driven by supply clearance and weight reduction [1] - The poultry sector continues its recovery momentum, with stable supply and demand for white feather chickens, while the prosperity of yellow feather chickens is likely to continue until the end of the year [1] - The Livestock ETF (159865) tracks the China Securities Livestock Index (930707), which selects listed companies involved in livestock farming and feed processing to reflect the overall performance of related securities [1] Group 2 - The China Securities Livestock Index covers multiple sub-sectors, including livestock farming, feed, and animal health, demonstrating strong industry representation [1] - As of September 15, 2025, the "pig content" in the Livestock ETF is approximately 60%, indicating the weight of securities related to pig farming, feed, and animal health [1] - The fluctuations in scale and pig content data do not predict future performance, and any mention of individual stocks is for reference only, not constituting investment advice [1]

Core Viewpoint - The article discusses the current state and future outlook of the pig farming industry, highlighting the imbalance between supply and demand, the impact of seasonal factors, and the expected price movements in the near and long term [4][6][14]. Supply Side - The production capacity of breeding sows remains high, with no effective reduction despite long-term profitability in the industry. The industry is expected to face a dual loss situation for piglets and fattening pigs starting from late September [10]. - Even if the culling of sows begins in October, significant supply pressure relief will not occur until after August 2026. The supply may remain excessive until June 2026, depending on the culling pace of the breeding sector [10]. Demand Side - Seasonal demand is anticipated to increase due to the drop in temperatures, with a boost in demand for cured meats in November and December, as well as pre-festival consumption leading up to the Spring Festival [12]. - The absolute low prices may also stimulate consumption, potentially providing a floor for short-term pig prices [12]. Market Outlook - In the near term, low-priced contracts have limited downward space, but there is also no upward momentum, with future movements expected to follow spot market fluctuations [5][14]. - The current contango structure in the futures market indicates that both near-month and long-month contracts have seen significant declines, with the near-month contracts approaching cash flow costs [14]. - The price of live pigs has dropped below 12 yuan/kg, leading to panic selling among some farmers, which has further accelerated the price decline. However, the weight of pigs continues to increase, indicating that short-term capacity clearing is unlikely without a significant demand increase [8][10].

Group 1 - The livestock industry is experiencing a downward trend in profitability, particularly in the pig sector, while the poultry sector shows signs of recovery due to seasonal demand and reduced imports [1][2] - In Q3 2025, the average price of live pigs in China is approximately 14.0 CNY/kg, reflecting a 4% decrease quarter-on-quarter and a 28% decrease year-on-year, with self-breeding profits at about 42 CNY per head and losses of 118 CNY per head for purchased piglets [1][2] - The policy direction continues to focus on reducing breeding sows and controlling weight, with the number of breeding sows at 40.38 million as of the end of August 2025, a slight decrease of 0.1% [2][3] Group 2 - The pig farming sector faces short-term pressure on profitability due to high supply and declining prices, with expectations of a 10%-16% year-on-year increase in supply for Q3 and Q4 [3][4] - The white-feathered chicken market is stabilizing, with prices recovering due to seasonal demand, while yellow-feathered chicken prices rebounded significantly in August after a decline earlier in the year [4][5] - The livestock sector is expected to see a bottoming out and recovery, with supply-side adjustments and weight reductions likely to support price recovery in the pig sector, while the poultry sector continues its upward trend [5][6] Group 3 - The livestock industry is transitioning from a cyclical bottom to a recovery phase, with the livestock ETF (159865) receiving significant capital inflows, totaling 1.595 billion CNY in the past month [5][6] - As of October 15, 2025, the price-to-earnings ratio (PE) of the livestock index is 14.35, indicating a low valuation compared to historical levels, with the pig industry accounting for about 60% of the index [5][6] - The industry is expected to see improvements in supply-demand dynamics and profitability recovery from Q4 2025 to the first half of 2026, presenting investment opportunities related to capacity reduction [5][6]