1. Report Industry Investment Rating - No relevant content 2. Core Viewpoints of the Report - In the first three quarters of 2025, the year-on-year growth rates of pig inventory, pig slaughter volume, and pork production further expanded compared to the first half of the year, leading to supply - side pressure and a continuous decline in pig prices to historical lows [14]. - The pig production capacity cycle in China has likely peaked, with the farrowing sow inventory peaking in August 2025 and declining in September. According to the theoretical calculation of pig slaughter 10 months after farrowing sow inventory, the pig slaughter volume is expected to peak around June next year, and the supply pressure will remain high [14][15]. - The low pig price in October is likely the first emotional bottom - building. Considering the continuous supply pressure and the off - season of demand, there is a high probability of a second bottom - building in pig prices in the first half of next year [15]. 3. Summary by Relevant Catalogs Pig Inventory - At the end of the third quarter, the national pig inventory was 436.8 million heads, a year - on - year increase of 9.86 million heads (2.3%) and a quarter - on - quarter increase of 12.33 million heads (2.9%). It is expected to continue growing in the fourth quarter due to the previous growth of farrowing sow inventory [6][7]. Farrowing Sow Inventory - At the end of September, the farrowing sow inventory was 40.35 million heads, a year - on - year decrease of 280,000 heads (0.7%) and a quarter - on - quarter decrease of 90,000 heads (0.2%). The decline indicates that the industry has entered a production capacity reduction cycle due to losses in piglet sales and pig fattening caused by low pig prices [3]. Pig Slaughter Volume - In the first three quarters, the national pig slaughter volume was 529.92 million heads, a year - on - year increase of 9.62 million heads (1.8%), with the growth rate 1.2 percentage points higher than that in the first half of the year and continuous growth for three quarters. In the third quarter, the pig slaughter volume was 163.73 million heads, compared with 156.35 million heads in the same period last year [9]. Pork Production - In the first three quarters, the pork production was 43.68 million tons, a year - on - year increase of 1.28 million tons (3.0%), reaching the highest level in the past 10 years. The increase is due to the 1.8% year - on - year increase in pig slaughter volume and the higher average pig slaughter weight than the previous year (128.25 kg as of October 16 this year compared to 126.34 kg last year) [11][12].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - 'Year-on-year' comparison has limited significance, and it's advisable to compare with the same period in 2023. The supply increase in 2025 compared to Q1 2024 was expected. The comparison with 2023 shows that the decline in quarterly pig存栏 has significantly narrowed, indicating a continuous recovery in Q3 2025. The pig出栏 and pork production have increased, and the sow存栏 has been above the normal level despite two consecutive months of decline [10][12]. - The current pig production capacity cycle has started the de - capacity process, but it has just begun. The breeding sector has been in the loss cycle for less than two months, and the sow存栏 is expected to be slowly reduced. A significant decline in sow prices is needed to enter the next price - rising cycle [13]. - The main trading logic of live hog futures this year is the bearish view of continuous supply recovery. After the bearish expectation is basically fulfilled, it is trading the basis - repair logic. In the short - term, the futures price is approaching the spot price. In the medium - term, the hog出栏 is expected to increase until Q2 2026, and the futures will repair the basis according to the spot trend. In the long - term, it is recommended to wait for effective de - capacity before trading the far - month contract's upward trend [16]. Group 3: Summary by Directory 1. 'Year - on - year' effective meaning is insufficient, focus on the comparison with the same period in 2023 - In Q1 - Q3 2025, the national production of pork, beef, and poultry increased by 3.0%, 3.3%, and 7.2% respectively, while mutton production decreased by 4.3%. The hog出栏 was 529.92 million, an increase of 1.8% year - on - year, and the pork production was 43.68 million tons, a 3.0% increase. At the end of Q3, the national hog存栏 was 436.8 million, up 2.3% year - on - year, and the sow存栏 was 40.35 million, down 0.7% year - on - year [3][4]. - Comparing with 2023, the hog存栏 at the end of Q1 - Q3 2025 increased by 2.3% year - on - year but decreased by 1.2% compared to 2023. The hog出栏 increased by 1.8% year - on - year but decreased by 1.3% compared to 2023. The pork production increased by 3% year - on - year and 1.56% compared to 2023. In Q3 2025, the hog出栏 was 163.73 million, a 1.2% increase compared to Q3 2023, and the pork production was 13.48 million tons, a 6.2% increase [10][12]. 2. Questions and Thoughts on the Pig Production Capacity Cycle Thinking 1: What stage is the current pig production capacity cycle in? - The previous report pointed out that the current pig price was in the second half of the second half of the epidemic - driven passive de - capacity cycle, and active/passive de - capacity had not started. Now, the sow存栏 has decreased for two consecutive months, indicating the start of de - capacity. The de - capacity has just begun, and the sow存栏 is expected to be slowly reduced. The breeding sector has been in the loss cycle for less than two months, and the ratio of sow price to hog price is still at 77%, which needs to drop to 50% - 60% for effective de - capacity [13]. Thinking 2: What is the main trading logic of live hog futures? - This year, the futures market mainly traded the bearish view of continuous supply recovery. After the bearish expectation is fulfilled, it trades the basis - repair logic. In the short - term, the futures price is approaching the spot price. In the medium - term, the hog出栏 is expected to increase until Q2 2026, and the futures will repair the basis according to the spot trend. In the long - term, it is recommended to wait for effective de - capacity before trading the far - month contract's upward trend [16].

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Views - The spot price of live pigs is expected to remain weak in the coming week. In October, supply will increase while demand decreases, and the inventory cycle will shift from accumulation to reduction. The spot price is still in the process of finding a bottom [3]. - For the futures market, the LH2511 contract may see a basis - convergence market. There is an expectation of a cycle reversal in the third quarter of 2026, and the structure is mainly in a large reverse spread. The short - term support level for the LH2511 contract is 10,000 yuan/ton, and the pressure level is 11,500 yuan/ton [4]. 3. Summary by Relevant Catalogs 3.1 This Week's Market Review (9.29 - 10.12) Spot Market - Live pig prices are running weakly. The price of 20KG piglets in Henan is 20.4 yuan/kg (last week: 24.55 yuan/kg), the price of live pigs in Henan is 11.13 yuan/kg (last week: 12.58 yuan/kg), and the price of 50KG binary sows nationwide is 1,566 yuan/head (last week: 1,590 yuan/head) [1]. - On the supply side, the group's slaughter progress is slow, and individual farmers are reluctant to sell, resulting in a loose supply. On the demand side, the pre - festival stocking volume was large, the slaughter volume decreased after the festival, and some secondary fattening farmers actively entered the market. The average slaughter weight nationwide this week is 124.46KG (last week: 124.35KG), with a month - on - month increase of 0.09% [1]. Futures Market - Live pig futures prices are running weakly. The highest price of the LH2511 contract this week is 11,905 yuan/ton, the lowest price is 11,320 yuan/ton, and the closing price is 11,320 yuan/ton (last week: 12,575 yuan/ton). The basis of the LH2511 contract is - 190 yuan/ton (last week: 5 yuan/ton) [2]. 3.2 Next Week's Market Outlook (10.13 - 10.19) Spot Market - The spot price of live pigs will run weakly. Although it should have entered the active inventory reduction stage since mid - to - late September, effective inventory reduction has not been seen yet, and the spot price continues to decline. Supply is expected to increase in October, and demand will enter the off - season again, so the spot price is still in the process of finding a bottom [3]. Futures Market - The LH2511 contract closed at 11,320 yuan/ton on October 10th. The peak season during the double festivals fell short of expectations, and the expected slaughter volume will continue to increase significantly in October. The inventory cycle is still in the passive inventory accumulation stage, and the spot price bottom has not appeared. For the 2026 third - quarter market, there is an expectation of a cycle reversal, and the structure is mainly in a large reverse spread. Short - term support and pressure levels are 10,000 yuan/ton and 11,500 yuan/ton respectively [4]. 3.3 Other Data - This week's basis is - 190 yuan/ton; the LH2511 - LH2601 month spread is - 820 yuan/ton [8]. - The average weight this week is 124.46KG (last week: 124.35KG). In August, pork production was 5.309 million tons, a month - on - month increase of 5.9%; pork imports were 81,700 tons, a month - on - month decrease of 7.46% [11].

Report Summary 1. Report Industry Investment Rating - There is no information provided on the report's industry investment rating in the given content. 2. Core View of the Report - The trend strength is -1, indicating a relatively bearish stance, with -2 being the most bearish and 2 being the most bullish [2]. - In August, the planned出栏 volume of group farms increased, small - scale farmers had passive backlogs, demand growth was limited, large - scale farms' efforts to reduce supply and support prices were ineffective, daily trading was poor, and it was difficult to absorb market supply. The supply pressure in the near - term was difficult to reverse, and the priority of the production - capacity cycle was higher than that of the inventory cycle. It is recommended to enter a 11 - 1 reverse spread trade. The state reserve purchase policy has been implemented, and during the passive inventory accumulation phase, supply pressure usually requires multiple rounds of state reserve purchases to be digested. The September contract is still at a premium to the warehouse - receipt cost, and the industry's willingness to deliver has increased, so the premium - collection market continues. The sentiment for purchasing piglets has declined, and the price decline has accelerated, corresponding to a decrease in the cost of pigs to be slaughtered in March. Attention should be paid to the downward - moving driver of the far - end price center, and stop - loss and take - profit should be noted. The short - term support level for the LH2509 contract is 13,000 yuan/ton, and the pressure level is 14,000 yuan/ton [3]. 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Spot Prices**: The Henan spot price is 13,780 yuan/ton with a year - on - year change of 0; the Sichuan spot price is 13,350 yuan/ton with a year - on - year decrease of 100; the Guangdong spot price is 14,790 yuan/ton with a year - on - year decrease of 150 [1]. - **Futures Prices**: The price of the 'pig2509' contract is 13,300 yuan/ton with a year - on - year decrease of 145; the 'pig2511' contract is 13,590 yuan/ton with a year - on - year decrease of 155; the 'pig2601' contract is 13,940 yuan/ton with a year - on - year decrease of 140 [1]. - **Trading Volume and Open Interest**: The trading volume of the 'pig2509' contract is 2,887 lots, a decrease of 1,339 from the previous day, and the open interest is 4,118 lots, a decrease of 1,746 from the previous day. The trading volume of the 'pig2511' contract is 30,542 lots, an increase of 4,380 from the previous day, and the open interest is 74,963 lots, an increase of 3,370 from the previous day. The trading volume of the 'pig2601' contract is 13,435 lots, an increase of 2,826 from the previous day, and the open interest is 48,133 lots, an increase of 582 from the previous day [1]. - **Basis and Spreads**: The basis of the 'pig2509' contract is 480 yuan/ton with a year - on - year increase of 145; the 'pig2511' contract basis is 190 yuan/ton with a year - on - year increase of 155; the 'pig2601' contract basis is - 160 yuan/ton with a year - on - year increase of 140. The 9 - 11 spread of pigs is - 290 yuan/ton with a year - on - year increase of 10 [1].

Group 1 - The core viewpoint of the article highlights a slight recovery in the breeding capacity of sows in the second quarter, with a total stock of 40.43 million heads by the end of June, reflecting a 0.1% increase compared to the previous month, nearing the levels expected by the end of Q2 2024 [1] - In terms of pig supply, the total output expected by Q2 2025 is 171.43 million heads, which is a year-on-year increase of 1.2%, with an average meat yield per head of 82.72 kg, up by 0.46 kg from the previous period [1] - The average price of commercial pigs dropped to 14.57 yuan/kg in June, a decrease of 20.6% year-on-year, while the price of piglets fell by 14.5% year-on-year, leading to a narrowing of average profits for large-scale farms to 7 yuan per head, with smallholders facing a loss of 6 yuan per head [1] Group 2 - The breeding ETF (159865) tracks the China Securities Livestock Index (930707), which selects listed companies involved in livestock feed, breeding, vaccines, and veterinary drugs to reflect the overall performance of the livestock industry [1] - The index comprehensively covers the upstream and downstream industries of livestock, effectively representing the overall development status of the sector [1] - Investors without stock accounts can consider the Guotai China Securities Livestock Breeding ETF Connect A (012724) and Connect C (012725) [1]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The 'year-on-year growth' of the current data has limited practical significance, and the market should focus on the relative strength between the current supply increase and the increase already reflected in the futures market [7]. - The current pig price is in the second half of the small cycle of passive capacity reduction due to diseases, and active/passive capacity reduction has not yet started [10]. - The most likely way to reduce capacity this year is passive capacity reduction driven by diseases, but large - cycle market trends still await active capacity reduction driven by low prices [12]. - The main trading logic of live - hog futures this year is the bearish logic of continuous supply recovery. After the bearish expectations are basically fulfilled, it trades the basis repair logic under different drivers [13]. 3. Summary by Directory 3.1 'Year - on - Year Growth' Effective Significance Is Insufficient - Due to capacity adjustments in 2023 - 2024, the year - on - year growth in 2025 supply was expected and already reflected in the futures market. Comparing 2025 data with 2023 shows that although the number of live - hogs in the first quarter of 2025 was higher than in 2024 but lower than in 2023, the increase in pork output was due to higher slaughter weights [7][8]. - Comparing the first half of 2025 with the same period in 2024 and 2023, the decline in the number of live - hog inventories in the second quarter of 2025 narrowed compared to 2023, and the year - on - year growth rate of live - hog slaughter in the first half of the year increased compared to the first quarter, indicating a continuous recovery in inventory. However, the contribution of weight to pork output in the second quarter weakened compared to the first quarter, and overall supply pressure still exists [8][9]. 3.2 Pig Capacity Cycle Issues and Thoughts 3.2.1 Current Stage of the Pig Capacity Cycle - As of the end of the second quarter, the number of breeding sows increased quarter - on - quarter. The current pig price is in the second half of the small cycle of passive capacity reduction due to diseases, and active/passive capacity reduction has not yet started [10]. 3.2.2 How to Achieve Capacity Reduction - There are three ways to reduce capacity: active capacity reduction driven by low prices (currently ineffective as pigs and piglets are profitable); passive capacity reduction caused by diseases (need to pay attention to winter disease prevention at the end of the year); and forced capacity reduction driven by environmental protection policies (the most likely way currently, which will promote large - scale development) [11]. 3.2.3 Main Trading Logic of Live - Hog Futures - The main trading logic this year is the bearish logic of continuous supply recovery. After the bearish expectations are fulfilled, it trades the basis repair logic. In the long - term, maintain a short - selling strategy unless the number of newborn piglets decreases; in the medium - term, it may operate in a wide range around the expected support and pressure of spot pig prices; in the short - term, it is trading the repair of the futures discount driven by the weight - reduction expectation [13].