Report Industry Investment Rating - No information provided Core Views of the Report - The year-on-year comparison of 2025 data has limited significance, and attention should be paid to whether the inflection point of pig supply is confirmed. There is a possibility that the pig inventory will decline in the first quarter of 2026, and it is necessary to track the data to confirm the inflection point [12][13]. - In 2025, the contribution of pork to the supply increment was significantly enhanced, with an increase in pork production despite a decrease in pig slaughter compared to 2023 [12]. - The reduction of the sow inventory has been basically achieved, and it is expected that the sow inventory will not decline significantly in the next few months, which will limit the upward expectation of pig prices in the second half of 2026 [13][14]. - In the short term, the pig price has stopped rising and stabilized, with pressure from both supply and demand; in the medium term, the supply pressure will be relieved from April; in the long term, the supply pressure will be reduced after September [17]. - In 2026, the pig price in the first quarter may rise first and then fall, the supply in the second quarter is expected to form an inflection point, and the pig price in the second half of the year is expected to strengthen but with limited space [19][21][22]. Summary by Directory 1. 'Year-on-year' has limited significance, focus on whether the supply inflection point is confirmed - Comparison of 2025 and 2023 data: The annual pig inventory in 2025 increased by 0.5% year-on-year but decreased by 1.05% compared to 2023; the annual pig slaughter increased by 2.4% year-on-year but decreased by 0.1% compared to 2023; the pork production increased by 4.1% year-on-year and 2.5% compared to 2023 [12]. - Attention to the inflection point of pig supply: The pig inventory at the end of 2025 decreased by 1.63% compared to the third quarter. It is expected that the pig inventory at the end of the first quarter of 2026 may be lower than that at the end of 2025. It is necessary to track the data to confirm the inflection point [13]. - Sow inventory: The sow inventory decreased to 3961000 at the end of 2025, which is 101.6% of the normal reserve. It is expected that the sow inventory will not decline significantly in the next few months, which will limit the upward expectation of pig prices in the second half of 2026 [13][14]. 2. Review of previous report content 2026 January 19 Pig Futures Morning Report - Important information: The pig price continued to rise over the weekend due to snow and early downstream stocking. The national average pig price on the 18th was 13.17 yuan/kg, up 0.45 yuan/kg from last Friday. The sow inventory in October 2025 was 3990000. The number of new - born piglets increased from January to September 2025 (only decreased in July), and decreased in October and November, corresponding to a decrease in supply pressure from April [15]. - Market logic: In the short term, the pig price has stopped rising and stabilized; in the medium term, the supply pressure will be relieved from April; in the long term, the supply pressure will be reduced after September. Pay attention to the impact of diseases [17]. - Trading strategy: Maintain a range - trading strategy. Pay attention to the pressure and support levels of different contracts [18]. 2026 January 3 Special Report 'Key Transactions in the Pig Industry in 2026: The Expected Difference in Capacity Reduction' - First quarter of 2026: The pig price may rise first and then fall. The supply will increase before March and decrease after April. The demand has seasonal characteristics, with a weakening of the southern pickled meat consumption increment. The pig price may be low - level volatile and strong before the Spring Festival and weak after the Spring Festival [19][20]. - Second quarter of 2026: The pig supply is expected to form an inflection point, and the pig price may stop falling and stabilize, with an average price of 11 - 12.5 yuan/kg [21]. - Second half of 2026: The pig price is expected to strengthen but with limited space. The upward space in the third quarter depends on the impact of winter diseases, and the pig price in the fourth quarter depends on the sow inventory from December 2025 to February 2026. Pay attention to the sow inventory reduction rhythm, production efficiency, and slaughter weight [22][23].

Summary of Key Points from the Conference Call Industry Overview: Swine Farming Industry - The swine farming industry is experiencing a shift in production capacity and pricing dynamics as of the end of 2025, with a notable increase in the breeding sow inventory by 8.2% year-on-year, but a significant month-on-month decline in December [1][2] - The number of replacement sows has been decreasing since September, particularly in small-scale farms, while large enterprises maintain stable production capacity, indicating a tightening supply of pigs in the future [1][2] Core Insights and Arguments - In 2025, the external sales of breeding pigs decreased by 5.3% year-on-year, while the number of culled sows increased by approximately 23.6%, leading to a slight overall production capacity decline of 2-3% [1][3][4] - The fourth quarter of 2025 saw unusual price fluctuations, with prices soaring in the first half and plummeting in the second half, dropping below 11 yuan/kg due to high slaughter and wholesale volumes in October [1][6] - The price of live pigs is expected to fluctuate around the cost line in the future, influenced by the willingness of farmers to sell, which is a critical factor to monitor [1][9] Production Efficiency and Market Dynamics - The production efficiency in the swine industry has significantly improved, with the PSY (pigs weaned per sow per year) nearing 27, a 4.8% increase year-on-year, while the average number of healthy piglets per litter remains stable at around 12.1-12.2 [3][14][15] - The average cost for large-scale breeding farms is approximately 13.4 yuan/kg, with expectations for 2026 prices to be slightly lower than in 2025, with most large enterprises predicting prices between 12-13 yuan/kg [17][18] Market Sentiment and Future Expectations - The market sentiment is cautious, with expectations of price stabilization around the cost line, depending on the supply dynamics and farmers' selling behavior [1][9] - The concentration of production in large enterprises is increasing due to their advantages in disease prevention, funding, and market analysis, making it difficult for small farms to compete [3][10] - The overall stability of the swine industry is attributed to improved disease control capabilities among large enterprises, which has positively impacted production efficiency [16] Additional Important Insights - The significant increase in slaughter volumes in October, November, and December indicates a rise in market supply, which may prevent prices from rising significantly [1][9] - The reduction in the number of small-scale farms (under 5,000 pigs) is primarily due to competitive disadvantages in disease prevention and funding, leading to a further concentration of the industry [10] - The potential for losses in 2026 is considered low, as the industry experienced good profits in 2025, with expectations that demand and other factors may stabilize profits in the coming year [18]

Summary of the Conference Call on November Pig Production Data Industry Overview - The conference call focused on the pig farming industry in China, specifically discussing the production capacity and market trends as of November 2025 [1][2]. Key Points and Arguments Pig Production Capacity - The national breeding sow inventory decreased by 0.62% month-on-month in November 2025, but increased by 0.82% year-on-year. Compared to the peak in June, there was a reduction of 380,000 sows, primarily due to policy guidance, market expectations, and disease impacts [1][2]. - The average weight of pigs at slaughter in November was 124.66 kg, showing a slight increase of 0.09% month-on-month but a decrease of 0.83% year-on-year [1][6]. Market Prices and Profitability - The average price of pigs continued to decline, reaching 11.13 CNY/kg by December 5, 2025. This price level resulted in over 95% of enterprises operating at a loss, with losses of approximately 100 CNY per head for self-breeding and around 300 CNY per head for piglet fattening [1][5]. - The price is expected to remain below 12 CNY/kg before the Spring Festival due to sufficient supply and increased slaughtering pace in December [1][10]. Supply and Demand Dynamics - The supply of pigs in November was ample, with a decrease in large enterprise slaughtering but also a significant reduction in secondary fattening targets, which dropped by 71% [1][7][8]. - The demand in southern regions was weak due to higher temperatures and lower stocking intentions, contributing to the price decline [1][8]. Future Price Predictions - It is anticipated that pig prices will not exceed 12 CNY/kg before the Spring Festival, with a potential slight increase in mid-December due to increased stocking by downstream buyers and reduced slaughtering by farming groups [1][10]. Disease Impact - Recent outbreaks of pig diseases in regions like Shandong and Jiangsu have affected both small-scale and large farming groups, leading to a decrease in breeding sow inventory [1][4][11]. - The disease situation has worsened compared to the previous year, with a significant increase in incidence rates, particularly in the northern regions [1][21]. Financial Health of the Industry - The overall cash flow situation in the pig farming industry is poor, with losses per pig reaching 300 to 400 CNY since August 2025. Approximately 60% to 70% of farming companies are experiencing cash flow difficulties [1][18][19]. Cost Trends and Future Outlook - The cost of pig farming is expected to continue decreasing, primarily due to lower feed prices and the adoption of superior breeding stock, which enhances reproductive performance and reduces feed conversion ratios [1][23][24]. - The industry is likely to see a recovery in profitability by the second half of 2026 as production capacity decreases and demand increases during peak consumption seasons [1][15]. Additional Important Insights - The differences in data reporting between the Ministry of Agriculture and third-party organizations highlight the complexities in understanding market dynamics and the impact of policy measures on production capacity [1][12]. - The willingness of small and medium-sized farms to reduce production capacity is low, as they anticipate potential profits during peak demand periods [1][13]. This summary encapsulates the critical insights from the conference call regarding the current state and future outlook of the pig farming industry in China.

Investment Rating - The industry investment rating is "Overweight" [5] Core Insights - In September 2025, the total number of pigs slaughtered by listed companies reached 15.2934 million, representing a year-on-year increase of 27.11% but a month-on-month decrease of 5.92% [10][11] - The significant year-on-year growth in slaughter volume is attributed to the release of new production capacity in 2024, while the month-on-month decline is due to leading companies like Muyuan and others responding to policy calls by slaughtering heavier pigs earlier [10][11] - The average selling price of pigs in September 2025 decreased by 5.42% month-on-month and 30.18% year-on-year, with the current prices being the lowest for the peak season since 2022 [19][20] - The cumulative revenue for the first three quarters of 2025 for listed pig companies was 222.871 billion, reflecting a year-on-year increase of 7.15% despite the decline in average selling prices [11][12] Summary by Sections Slaughter Volume - In September 2025, listed pig companies reported a slaughter volume of 15.2934 million pigs, with leading companies like Muyuan, Wens, and New Hope slaughtering 5.573 million, 3.3253 million, and 1.3942 million pigs respectively [10][11] - The cumulative slaughter volume for the first three quarters of 2025 was 139 million pigs, showing a year-on-year increase of 20.39% [10][11] Revenue and Pricing - The revenue for September 2025 was 21.647 billion, down 18.74% year-on-year and 10.77% month-on-month, primarily due to lower selling prices [11][12] - The average selling price for pigs in September was 13.26 yuan per kilogram, which is significantly lower than the previous year [19][20] Weight and Performance - The average weight of pigs slaughtered in September was 106.74 kg, showing a slight year-on-year increase of 0.44% but a month-on-month decrease of 0.39% [20] - Leading companies reported average weights of 126.30 kg, 113.51 kg, and 97.16 kg for Muyuan, Wens, and New Hope respectively [20]

Core Viewpoint - The article discusses the recent trends in pig prices and natural rubber prices, highlighting the factors influencing these markets and the implications for supply and demand dynamics [3][4][5]. Group 1: Pig Prices - As of July 25, the average price of external three yuan pigs in China was 14.15 yuan/kg, reflecting a week-on-week decrease of 0.84%. The average price of 15 kg piglets was 31.89 yuan/kg, down 0.22% week-on-week [3]. - The average weight of market pigs for the week was 128.48 kg, which is a decrease of 0.35 kg week-on-week. The national frozen product inventory rate increased to 14.46%, up 0.1 percentage points [3]. - In June, the average price of market pigs fell to 14.57 yuan/kg, a decrease of 2.3% month-on-month and 20.6% year-on-year. The average price of piglets was 37.25 yuan/kg, down 4.8% month-on-month and 14.5% year-on-year [4]. Group 2: Supply and Production - The number of breeding sows as of the end of June was 40.43 million, showing a slight quarter-on-quarter and year-on-year increase of 0.1% [4]. - In Q2 2025, the total number of pigs slaughtered was 171.43 million, a year-on-year increase of 1.2% but a quarter-on-quarter decrease of 12%. Pork production reached 14.18 million tons, up 1.4% year-on-year but down 11.5% quarter-on-quarter [4]. - The average profit per pig in June dropped to near the breakeven point, with large-scale farms reporting a profit of 7 yuan per pig, down from 49 yuan in May, while smallholders faced a loss of 6 yuan per pig [4]. Group 3: Natural Rubber Prices - As of July 25, domestic natural rubber futures prices reached 15,455 yuan/ton, reflecting a week-on-week increase of 4.14%. Market sentiment remained high due to supply concerns following border conflicts between Thailand and Cambodia [5]. - The inventory of rubber in the Qingdao area was 626,900 tons, a slight decrease of 0.2 tons week-on-week, with general trade inventory at 532,800 tons and bonded zone inventory at 94,100 tons [5].

Core Viewpoint - The recent increase in live pig futures prices is attributed to a tightening supply and positive market sentiment for the upcoming peak season in August and September, with prices rebounding over 5% from previous lows [1][4]. Supply and Demand Dynamics - The market is experiencing a tightening supply due to factors such as reduced large pig availability and increased frozen product inventory, which supports pig prices [1]. - Analysts note that the sentiment among small-scale farmers is to hold onto pigs in anticipation of higher prices in late July to August, leading to a decrease in supply [1][2]. - The overall pig supply is expected to increase gradually throughout the year, but short-term supply may be limited due to factors like piglet diarrhea outbreaks [4][5]. Price Trends - The average price of piglets has dropped to 36.91 yuan per kilogram, a decrease of 1.8% week-on-week and 16.7% year-on-year, indicating a cautious market [2]. - The price of 15 kg piglets has fallen from 670 yuan per head in mid-April to 530 yuan currently, primarily due to high costs and low seasonal demand [3]. Profitability and Cost Factors - Current breeding profits are generally positive, although there is a structural divide where some farmers face losses due to high costs of purchased piglets [2][4]. - Rising costs of feed ingredients like corn and soybean meal may impact cash flow for farmers in the latter half of the year [2]. Future Outlook - The market is expected to see a significant increase in piglet supply in September and October, which may exert downward pressure on prices [4]. - The current price increase is seen as temporary, with expectations that the market will transition from inventory accumulation to depletion, potentially leading to price declines in the fourth quarter [4][5].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The current supply - demand fundamentals of the pig market have not improved substantially. Although the short - term price is supported by factors such as farmers' reduced sales and increased second - fattening, the overall supply is still loose due to weakened terminal consumption, group farms' weight reduction and increased supply, and active sales by social farms [7]. - The pig production capacity is sufficient. Although the number of breeding sows has declined slightly, it is still above the normal level, and the production efficiency has increased. If pork consumption does not grow significantly, the room for pig price increase before September 2025 may be limited [7]. - In the short term, the improvement of market sentiment supports the strengthening of the futures market. The resistance level of the main contract is around 14,000. For options, out - of - the - money call options can be sold [8]. 3. Summary According to Relevant Catalogs 3.1. Weekly Views and Strategies - **Fundamental Situation**: The national average pig slaughter price was 14.12 yuan/kg, a week - on - week increase of 1.07% and a year - on - year decrease of 23.63%. The supply - demand relationship remained loose. The number of breeding sows in April 2025 was 40.38 million, a year - on - year decrease of 1.3%. The production capacity was sufficient, and the pressure on pig slaughter in the later period was still large [7]. - **Outlook and Strategy**: The supply in the pig market is sufficient in the current and future periods, and the price is under downward pressure. The short - term market sentiment supports the strengthening of the futures market, and the resistance level of the main contract is 14,000. Out - of - the - money call options can be sold [8]. 3.2. Futures and Spot Markets - **Pig Futures and Spot Prices**: The national average pig slaughter price was 14.12 yuan/kg, with a week - on - week increase of 0.15 yuan/kg and a week - on - week increase of 1.07%. The supply - demand fundamentals have not improved, and the market supply - demand remains loose [12]. - **Futures Spreads**: No specific analysis content provided, only pictures are shown. - **Pig Standard - Fat and Gross - White Price Differences**: The price of standard pigs was mainly supported by market sentiment, and the price of large pigs increased. The standard - fat price difference widened slightly compared with last week [29]. - **Prices of Piglets and Binary Sows**: The average price of 7 - kg weaned piglets was 445.71 yuan/head, a week - on - week decrease of 4.98% and a year - on - year decrease of 33.00%. The price is expected to remain weak in the short term [33]. - **Price of Culled Sows**: The average price of culled sows was 10.50 yuan/kg, a week - on - week increase of 0.77% and a year - on - year decrease of 23.02%. The price is expected to be weakly adjusted next week [36]. 3.3. Production Capacity - **Inventory of Breeding Sows**: In April 2025, the inventory of breeding sows was 40.38 million, a decrease of 400,000 compared with December 2024. In May, the inventory of breeding sows in large - scale farms and small and medium - sized farms increased slightly. It is expected that the inventory may not increase in June [40][44]. - **Elimination Volume of Breeding Sows**: In May, the elimination volume of breeding sows in large - scale farms and small and medium - sized farms decreased slightly. It is expected that the elimination volume may be stable and difficult to decrease in June [48]. - **Inventory Proportion of Breeding Sows**: No specific analysis content provided, only pictures are shown. 3.4. Supply Side - **Inventory of Commercial Pigs**: In May, the inventory of commercial pigs in large - scale farms and small and medium - sized farms increased. It is expected that the inventory may decrease in June [55]. - **Slaughter Volume of Commercial Pigs**: In May, the slaughter volume of commercial pigs in large - scale farms and small and medium - sized farms decreased. It is expected that the actual slaughter volume may increase in June [58]. - **Inventory Structure of Commercial Pigs**: In May 2025, the inventory proportion of 7 - 49 kg piglets decreased, the inventory of 140 - kg and above large pigs decreased, and the inventory of 90 - 140 kg pigs increased slightly [61]. - **Average Slaughter Weight of Commercial Pigs**: The national average slaughter weight of foreign - ternary pigs was 123.78 kg, a week - on - week decrease of 0.15%. It is expected that the slaughter weight may continue to decrease slowly next week [64]. 3.5. Demand Side - **Pig Slaughter Volume**: No specific analysis content provided, only pictures are shown. - **Cold Storage Rate of Slaughtering Enterprises**: Terminal consumption is weak, and the cold storage rate of frozen products is at a low level. The domestic frozen products are in the de - stocking stage, and the impact on pig prices is limited [73]. - **Operating Rate and Fresh Sales Rate of Slaughtering Enterprises**: The operating rate of slaughtering enterprises this week was 27.97%, a week - on - week increase of 0.75 percentage points. It is expected that the operating rate may decline in the future due to weak demand [76]. - **Substitute Prices**: No specific analysis content provided, only pictures are shown. 3.6. Cost and Profit - **Profit of Pig Breeding and Slaughtering**: The weekly average profit of self - breeding and self - raising mode was 61.11 yuan/head, a week - on - week increase of 9.4 yuan/head. The weekly average loss of the mode of purchasing piglets increased to 53.71 yuan/head, a week - on - week increase of 25.16 yuan/head [89]. - **Gross Profit of Slaughtering and Feed - to - Meat Ratio**: No specific analysis content provided, only pictures are shown. - **Pig - to - Grain Ratio**: The current pig - to - grain ratio is 5.86, with little change. It is expected to be stable with a slight decrease next week [96].

Report Industry Investment Rating - No specific industry investment rating is provided in the report. Core Viewpoints - The overall live pig price in the country rebounded slightly today, but the market supply is still relatively abundant, and there is still downward pressure on prices in the short - term. The futures market showed a significant rebound today, but in the long - term, due to high production capacity, the supply pressure remains high, and the price increase is difficult. The inter - monthly spread of the futures market is expected to move downward [4][6]. Summary by Relevant Content Spot Price - Today, the spot prices in various regions showed different degrees of change. For example, the price in Henan increased from 13.91 to 14.13, and in Anhui it rose from 14.00 to 14.24. The average price remained unchanged at 13.74 [4]. Futures Price - Futures prices generally showed an upward trend. For example, LH07 increased from 13070 to 13225, and LH09 rose from 13475 to 13595 [4]. Sow/Piglet Price - Piglet prices decreased from 481 to 465, and sow prices dropped from 1626 to 1621 [4]. Spot Breeding Profit - The self - breeding and self - raising profit decreased from 35.65 to 33.83, and the profit from purchasing piglets decreased from - 84.37 to - 120.80 [4]. Slaughter End - The slaughter volume decreased from 142829 to 141441 [4]. Size Pig Price Difference - The price difference between standard pigs and medium - sized pigs increased from 0.29 to 0.31, while the price difference between large pigs and standard pigs decreased from 0.08 to 0.05 [4]. Trading Strategy - Unilateral: Mainly in a volatile operation - Arbitrage: LH79 reverse spread - Options: Sell a wide - straddle strategy [7]

Summary of Conference Call Records Industry Overview - The records primarily discuss the **pig farming industry** and the **pork market** dynamics in China, focusing on supply, demand, and pricing trends. Key Points and Arguments Short-term Price Trends - Short-term support for pig prices is expected from fattening or secondary fattening, but supply release will lead to prices hitting a new low again. Post-Duanwu Festival, a supply-demand mismatch may cause price declines in July and August [1][3] - The market is currently in a wait-and-see phase, with supply-demand ratios needing to find new equilibrium points, potentially around June 4 or June 5 [3] Medium-term Outlook - Medium-term expectations indicate that weight reduction and decreased fattening stock will alleviate supply-demand pressure, coupled with the upcoming consumption peak, leading to a potential price increase [1][3] - The number of breeding sows is showing a downward trend, with an increase in the number of sows being culled, reflecting market pessimism regarding pig prices for the second half of the year and next year [1][5] Long-term Projections - Long-term projections suggest a marginal decrease in production capacity by 2026 due to policy factors and insufficient future expectations from large-scale farms [1][10] - The overall market sentiment is pessimistic, with expectations of reduced production capacity driven by government measures to cut capacity [10] Slaughtering Trends - In 2025, slaughtering volumes exceeded expectations, with leading slaughterhouses seeing over a 30% year-on-year increase, attributed to improved product capabilities and concentrated farming structures [2][7] - The decline in slaughtering volumes from small-scale butchers and regional meat processing plants indicates a clear trend towards slaughtering centralization [2][7] Supply Chain Dynamics - The proportion of social pig sources received by slaughterhouses is low due to large output from farming companies and a cautious stance from farmers regarding future price expectations [3][4] - The current supply pressure remains significant, with the average weight of pigs being adjusted downwards, but the overall supply structure still shows high levels of stock [8][9] Factors Influencing Pork Prices - Key factors affecting medium to long-term pork price predictions include the transfer of stock structure, seasonal demand, and policy influences [6][10] - The second quarter's piglet numbers are insufficient to meet the supply demands for December and January, necessitating adjustments in stock and weight to compensate for seasonal demand [6][10] Market Behavior - The behavior of various market participants, including large farming companies and individual farmers, is influencing overall market trends, with large companies dominating sales channels while individual farmers reduce their output [4][5] Additional Important Insights - The current high culling rate of sows, approximately 5% in June, reflects market expectations and production cost management [10] - The overall market is characterized by a high stock rate and low turnover, limiting the space for replenishing piglets, which is a significant factor in the ongoing decline of piglet prices [10]