Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report Since late July, the live hog futures market has shifted from a "strong expectation - weak reality" state to a "weak reality - weak expectation" state, with the futures price declining under the drag of weak spot prices [2]. 3. Summary by Directory 3.1 Weak Reality Drags the Futures Price to Oscillate Lower In the past month, the live hog spot price has been oscillating lower. As of August 27, it dropped to the lowest level of the year at 13.6 yuan/kg. The live hog 2511 contract was dragged by the spot, and the previous premium on the futures side was squeezed [3]. 3.2 The Second Half of the Year Remains in the Period of Realizing Previous Production Capacity, with Ample Supply Yongyi sample data shows that the inventory of breeding sows increased by 0.07% month - on - month in August, with the growth rate slowing down compared to the previous month. Shanghai Steel Union data shows that the inventory of sample breeding sows decreased by 0.01% month - on - month in August. Overall, the supply of live hogs is expected to gradually increase in the second half of this year, as the inventory of breeding sows from November last year to February this year and the number of new - born piglets from March to June this year both indicate an increase in the theoretical slaughter volume of live hogs [6]. 3.3 The Enthusiasm for Secondary Fattening is Suppressed In the first half of the year, the secondary fattening group was in the replenishment stage, and the utilization rate of secondary fattening pens increased. Since July, due to the decline in the live hog spot price and the new low in August, the secondary fattening group has suffered losses. The current utilization rate of secondary fattening pens is still between 40% - 60%, which is expected to affect the later replenishment enthusiasm [11]. 3.4 Continue to Pay Attention to Policy Variables in the Medium and Long Term As of the end of July 2025, the officially announced inventory of breeding sows was 40.42 million heads, 3.6% higher than the normal inventory of 39 million heads proposed in 2024. The pig - grain ratio in large and medium - sized cities has fallen below 6:1 for the second consecutive week, and it is necessary to continue to pay attention to possible state reserve purchases [15].

Group 1 - August is typically a peak season for pig prices, but this year, prices have declined due to government calls for capacity reduction and weight control, leading to a drop below 7 yuan/kg [2] - The national pig-to-grain price ratio fell below 6:1, triggering a warning and subsequent pork reserve purchases totaling 10,000 tons, with additional announcements for 29,000 tons of reserve meat [4] - The purpose of the reserve purchases is to stabilize market sentiment and prevent a drastic drop in pig prices, indicating a likelihood of price stabilization [4] Group 2 - The pig production capacity is undergoing a phase of reduction, but it is expected to be intermittent rather than continuous, as producers will adjust based on market conditions [5] - There is a slight improvement in the market for larger pigs as consumption increases with the back-to-school season, allowing pig prices to recover somewhat [7] - Consumer demand for pork is gradually increasing, particularly as the fourth quarter approaches, which is traditionally a peak consumption period [8] Group 3 - The government's policy stance is clear, with recent reserve purchases aimed at preventing uncontrolled price drops while still pursuing capacity reduction [9] - The concentration of pig farming has increased due to the elimination of many small producers, leading to stronger risk resistance among larger enterprises, which are less likely to panic sell [11] - While the likelihood of significant price drops has decreased, the potential for price increases remains limited, suggesting a period of narrow fluctuations in pig prices [11]

Core Viewpoint - The pig market is experiencing fluctuations, with prices rising briefly before falling again, indicating that the decline is the norm rather than the exception [2][3]. Group 1: Market Dynamics - The current pig market is focused on capacity reduction, with the government having intervened three times this year to address production capacity issues [3]. - Despite a temporary increase in prices at the beginning of August, the market could not sustain this due to ongoing capacity reduction efforts [3]. - There is significant bearish sentiment in the market, with concerns that prices may fall below 7 yuan per jin [3]. Group 2: Regional Price Disparities - The pig market shows a clear divergence, with southern regions maintaining higher prices (above 7.5 yuan per jin) compared to northern regions, which are experiencing significant price drops [5]. - The reduction in pig supply from the north, coupled with increased pressure from secondary fattening in the north, has led to a supply surplus and price declines in those areas [6][8]. - Southern regions have a higher dependency on pork consumption, which supports their prices, while northern consumption shows seasonal volatility [8]. Group 3: Future Demand and Seasonal Factors - Demand for pork is expected to rebound in the third quarter as weather conditions improve and major holidays approach, which typically boost consumption [9]. - The upcoming Mid-Autumn Festival and National Day, along with the winter holiday season, are anticipated to provide additional support for pork consumption [9]. Group 4: Pricing and Production Management - The rhythm of pig sales is crucial; even with an overall supply surplus, prices may not continuously decline if sales are managed effectively [10]. - Current production strategies do not indicate a panic sell-off, which could mitigate drastic price drops [10]. - Experts predict that while breeding profits may decrease, most producers are still operating near the cost threshold of 14 yuan per kilogram, suggesting that prices may hover around 7 yuan per jin without sustained drops below this level [12].

Group 1 - The core viewpoint is that after a significant drop in pig prices in July, there has been a recovery in August, particularly in northern regions, with prices returning above 7 yuan per kilogram [2][4] - The support for the bottom of pig prices is believed to be strong, as the market is unlikely to see a complete and sustained drop back to previous lows [4] - Downstream consumption is gradually improving, with expectations of increased demand due to seasonal changes and upcoming holidays, which may lead to controlled pig sales [5][6] Group 2 - The trend of decreasing average weight of slaughtered pigs has been observed, reaching a six-year low, indicating effective measures in reducing production capacity and weight [6][8] - Despite the stabilization of pig prices, the overall supply pressure remains, making significant price increases challenging [8] - The fluctuations in pig prices also impact the corn and wheat markets, with current conditions suggesting that corn prices may remain strong in August due to stable demand from feed [10]

Report Industry Investment Ratings - No specific industry investment ratings are provided in the given content. Core Viewpoints - The report focuses on various agricultural products, including soybeans, soybean meal, soybean oil, palm oil, rapeseed meal, rapeseed oil, corn, hogs, and eggs. It analyzes the impact of factors such as trade negotiations, weather, policies, and market supply - demand on these products' prices and recommends corresponding investment strategies [2][3][4]. Summary by Related Catalogs Soybeans - Domestic soybeans have significantly reduced positions and pulled back. The Sino - US trade negotiation affects market sentiment, and the domestic commodity futures market has cooled down. The US Midwest has good weather, which is conducive to soybean production. Pay attention to the negotiation results, policy, and weather [2]. Soybeans & Soybean Meal - Before August 1st, the US tariff deadline, the third round of Sino - US trade talks will be held in Stockholm. China may resume importing US soybeans in the fourth quarter. If the US weather remains good, new - season soybeans may have a bumper harvest. The oil mill's soybean meal inventory has increased, and the soybean meal market is expected to fluctuate before the tariff issue is clear [3]. Soybean Oil & Palm Oil - The Sino - US trade negotiation affects market sentiment, and the domestic commodity futures market has cooled down. The US Midwest weather is good for soybean production. US soybean oil is strong, and palm oil is affected by multiple factors. It is recommended to buy on dips and be cautious of the short - term oil - strong and meal - weak situation [4]. Rapeseed Meal & Rapeseed Oil - Canadian rapeseed prices are expected to be under pressure in the short term due to uncertainties in Sino - Canadian economic and trade relations, fund reduction of long positions, and improved weather. The domestic rapeseed system continues to have low inventories, and it is expected to be in a weak and volatile state in the short term [6]. Corn - In July, CGSCC held 8 import corn auctions, with a continuous decline in the transaction rate and premium. The supply of corn has affected market expectations. The domestic corn market has no major contradictions, and the Dalian corn futures may continue to fluctuate weakly at the bottom [7]. Hogs - The sentiment of hog futures has weakened, and the spot price has been declining. The potential supply in the second half of the year is sufficient, and it is recommended that the industry participate in hedging at high prices [8]. Eggs - The spot price of eggs has declined, and the 08 contract has squeezed the premium. The 09 contract has also been affected. The far - month contracts in the first half of next year are relatively strong. It is necessary to pay attention to whether the spot price can continue the seasonal rebound [9].

Summary of Conference Call Records Industry Overview - The conference call primarily discusses the **pork industry** and the **pet supply chain** market in China, focusing on recent trends, regulatory impacts, and market dynamics. Key Points on the Pork Industry 1. **Pork Price Trends**: Pork prices are on a downward trend due to supply influences, with prices fluctuating around 14 RMB after a brief increase to over 15 RMB in June. This aligns with expectations of high annual output and piglet replenishment rates, indicating limited short-term price increases [1][2]. 2. **Regulatory Impact**: The government aims to stabilize pork supply and prevent price surges, with large farming enterprises playing a crucial role. Stricter measures may be implemented, including environmental regulations and financial controls, to achieve long-term stabilization [1][5]. 3. **Market Dynamics**: The pork industry is undergoing a natural price decline and capacity reduction process. Leading companies like Muyuan Foods are becoming more resilient in the competitive landscape, transitioning from cyclical to value stocks, making them attractive for long-term investment [1][7]. 4. **Production Forecast**: The pork price outlook for Q3 and H2 remains cautious, with high production levels expected to persist. The growth in output is anticipated to keep prices low, as the supply of pigs is not expected to decrease significantly in the short term [4][6]. 5. **Vaccination Developments**: The approval of clinical trials for African swine fever subunit vaccines is a positive development, although the timeline for market availability remains uncertain. This could directly impact companies like BioFeng and Zhongmu [3][15]. Key Points on the Pet Supply Chain 1. **Market Performance**: The pet consumption market showed strong performance in H1 2025, with total spending reaching approximately 77.3 billion RMB, an 8.8% year-on-year increase. Online sales dominate, while offline pet store sales grew only about 1% [8][9]. 2. **Trends in Pet Food**: The pet food market is experiencing product diversification and precision in consumer demand. High-end products and scientific pet care concepts are driving market upgrades, with categories like baked food seeing rapid growth [9][12]. 3. **Emerging Brands**: New brands are quickly rising by meeting consumer needs, indicating a shift towards higher quality and specialized products in the pet food sector [9][12]. 4. **Future Directions**: Domestic pet brands are expected to continue moving towards mid-to-high-end markets, focusing on scientific pet care and product upgrades to maintain growth. The competitive landscape in lower-end markets remains intense [12][14]. 5. **Market Outlook**: The pet industry outlook is optimistic, driven by differentiated products and strong domestic demand. The annual growth rate of new pet owners is stable at around 8%, with online sales growth of 15-16% last year [13][14]. Additional Insights - The pork industry is expected to see a gradual transition towards stable production levels, benefiting leading companies with lower costs and higher certainty in performance [6][7]. - The approval of the African swine fever vaccine is a significant milestone, but the path to market remains complex and uncertain, necessitating close monitoring of developments [15][17]. - The pet supply chain is poised for rapid growth over the next three to five years, presenting a compelling investment opportunity as consumer preferences evolve [14].

Report Information - Report Title: "Consumption Support Limited, Spot Market in Oscillatory Adjustment - Guoxin Futures Weekly Report on Live Pigs" [2] - Report Date: July 13, 2025 [2] Report Industry Investment Rating - Not provided in the report Core Viewpoints - In the past week, the live pig spot market oscillated and adjusted due to insufficient consumption support, while the futures market continued to rise, weakening the basis. The spread between LH9 and LH11 ended its adjustment and rose again [7]. - From a fundamental perspective, sample data from market institutions showed a slight month - on - month increase in the inventory of breeding sows in June, indicating that the process of reducing production capacity was not smooth. The price of piglets rebounded recently, partly due to the recovery of breeding profits stimulating fattening farmers to replenish stocks, and partly due to the reduction in the number of piglets born in June, which may have provided some boost [7]. - In terms of spot, the large - scale enterprises' slaughter plan in July decreased, and the price of fat and standard pigs among small farmers was relatively high, which may lead to continued pressure on farmers to hold back pigs to increase the average weight. The overall supply pressure in July is not large, but the consumption performance lacks highlights. Consumption is expected to increase in August, and the increase in slaughter is limited. It is expected that the spot market will oscillate and adjust before rising seasonally again, but the overall upward space is limited [7]. - The current discount of the futures main contract LH09 to the spot has narrowed, and it will follow the spot market to oscillate strongly in the later stage. Due to the expected increase in future supply, the outlook for more distant contracts is still not optimistic. In terms of operation, go long on LH09 with an oscillatory strategy, and wait for opportunities to short on the distant - month contracts after a rebound [7]. Summary by Directory 1. Weekly Analysis and Outlook - The live pig spot market oscillated and adjusted last week, and the futures market rose, weakening the basis. The spread between LH9 and LH11 increased again. The inventory of breeding sows increased slightly in June, and the price of piglets rebounded. The supply pressure in July is not large, and consumption is expected to increase in August. The spot market may rise seasonally after adjustment, and the futures main contract LH09 will follow the spot to oscillate strongly. Distant - month contracts are not optimistic. Operate by going long on LH09 and waiting to short on distant - month contracts [7]. 2. Key Data and Charts - Not elaborated in the provided content 3. Live Pig Futures Market - Not elaborated in the provided content 4. Live Pig Spot Market - Not elaborated in the provided content 5. Live Pig Spot: Basis after Regional and Average Weight Adjustment - On July 9, 2025, with the benchmark contract LH2509 at 14,265, the report provided the standard pig average price, weight range, regional premium and discount, standard pig basis, basis for different weight ranges, minimum basis, delivery storage capacity, and delivery speed for various provinces [21]. 6. Live Pig Spot: Price Difference between Fat and Standard Pigs - Not elaborated in the provided content 7. Live Pig Spot: Regional Price Difference - Not elaborated in the provided content 8. Changes in the Inventory of Breeding Sows - Not elaborated in the provided content 9. Changes in Piglets - Not elaborated in the provided content 10. Live Pig Inventory and Fattening Pig Feed Verification - Not elaborated in the provided content 11. Live Pig Slaughter - Not elaborated in the provided content 12. Frozen Meat Market Dynamics - Not elaborated in the provided content 13. Cost and Profit - Not elaborated in the provided content 14. Comprehensive Monitoring of Live Pig Average Weight - Not elaborated in the provided content 15. Central Reserve Frozen Pork Operations - The report introduced the reserve response mechanisms under the scenarios of excessive price decline and excessive price increase in the live pig market according to the "Improving the Government's Pork Reserve Adjustment Mechanism and Doing a Good Job in the Work Plan for Ensuring Supply and Stabilizing Prices in the Pork Market" [69]. 16. Multi - Caliber Comparison - Not elaborated in the provided content