Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints - Policy interventions are frequent, potentially affecting the long - term supply of live pigs. Long - term strategic view is bullish, but short - to medium - term is still based on fundamentals. The policy bottom has emerged, but the market bottom may need a production cycle to form. The current fundamental situation is oversupply. Policy expectations, along with issues like disease and transportation, led to concentrated slaughter during holidays, causing a short - term decline in pig prices. Although there were signs of a bottom in the futures market, the weakening of second - fattening has increased supply pressure again [3]. 3. Summary by Relevant Catalogs 3.1 Pig Price Forecast - The predicted price range for the main contract is 11,000 - 13,500. The current 20 - day rolling volatility is 12.64%, and its historical percentile over 3 years is 21.34% [2]. 3.2 Risk Management Strategies for Pig Enterprises - **Inventory Management**: For high product inventory and fear of inventory impairment, strategies include short - selling LH2601 futures (10% recommended), selling LH2601 - C - 13000 call options (10% recommended), and buying LH2601 - P - 11000 put options [2]. - **Procurement Management**: For future procurement plans and fear of price increases, strategies include buying long - term pig contracts according to the procurement plan, selling LH2601 - P - 11000 put options, and buying LH2601 - C - 13000 call options [2]. 3.3 Core Contradictions - Policy interventions are frequent, affecting long - term supply. The policy bottom has appeared, but the market bottom needs time. The current supply exceeds demand, and short - term price drops are due to concentrated slaughter and other factors. Although there were signs of a bottom in the futures market, supply pressure has increased again [3]. 3.4 Bullish and Bearish Factors - **Bullish**: Macro sentiment has improved, the standard - fat price spread is at a high level, and there is an expectation of capacity reduction in the medium - to long - term [6]. - **Bearish**: The inventory of breeding sows is still high, the inventory of large - scale enterprises is at a three - year high, downstream consumption is weak, and second - fattening has weakened recently [6]. 3.5 Pig Prices - **Spot Prices**: The national average is 11.47 yuan/kg, down 0.02 yuan (- 0.17%). Prices in different provinces vary, with some rising, some falling, and some unchanged [9]. - **Futures Prices**: All contracts except for the November contract declined. The January contract closed at 11,535 yuan/ton, down 1.37%; the March contract at 11,355 yuan/ton, down 1%; the May contract at 12,040 yuan/ton, down 0.82%; the July contract at 12,735 yuan/ton, down 0.93%; the September contract at 13,560 yuan/ton, down 0.62%; and the November contract remained unchanged at 11,800 yuan/ton [10]. 3.6 Pig Price Spreads and Basis - Spreads and basis between different contracts and regions have changed, with some increasing and some decreasing. For example, the LH01 - 03 spread increased by 7.14% to 225 yuan/ton [18][20].

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - Policy interventions have affected the long - term supply of live pigs. Long - term strategic outlook can be bullish, but short - to medium - term trends are still based on fundamentals. The policy bottom has emerged, but the market bottom may take a production cycle to form. Currently, the market is in a state of oversupply, and short - term pig prices have dropped rapidly due to concentrated slaughtering. With the arrival of the peak season, demand will improve, and there may be a structural shortage of large pigs, supporting prices during the peak season [3] 3. Summary by Relevant Catalogs 3.1 Pig Price Range Forecast - The predicted price range for the main contract is 11,000 - 13,500. The current volatility (20 - day rolling) is 24.24%, and the current volatility's historical percentile (3 - year) is 75.74% [2] 3.2 Pig Enterprise Risk Management Strategy Suggestions - **Inventory Management**: For high product inventory and fear of inventory impairment risk, strategies include short - selling live pig futures to lock in profits according to the inventory, selling call options when there is no suitable price on the futures market, and buying out - of - the - money put options to not miss potential price increases. Recommended ratios for short - selling futures and selling call options are both 10% [2] - **Procurement Management**: For future procurement plans and fear of raw material price increases, strategies are to buy live pig forward contracts according to the procurement plan to lock in costs, sell put options when there is no suitable price on the futures market, and buy out - of - the - money call options when not wanting to lock in profits in advance and expecting lower costs [2] 3.3 Core Contradictions - Policy interventions may impact long - term supply. The policy bottom has appeared, but the market bottom needs time. The current fundamental situation is oversupply, and short - term price drops are due to concentrated slaughtering. Recently, the number of pigs sold by large farms and second - fattening groups has decreased, and some second - fattening has started restocking. With the peak season, demand will improve, and there may be a shortage of large pigs [3] 3.4利多解读 (Likely Positive Factors, translated from Chinese) - Macro sentiment has improved, boosting market confidence. The price difference between standard and fat pigs is at a relatively high level in the same period. There is a medium - to long - term expectation of capacity reduction in the policy. The current pig price is low, fattening costs are down, and second - fattening speculators are entering the market. Large farms are selling fewer pigs [6] 3.5利空解读 (Likely Negative Factors, translated from Chinese) - The inventory of breeding sows is still relatively high. The inventory of large - scale enterprises is at a three - year high. Terminal consumption downstream is weak. The occupancy rate of second - fattening pens has returned to a high level [6][7] 3.6 Pig Spot Prices - The national average pig spot price is 11.78 yuan/kg, down 0.15 yuan or 1.26%. Prices in Henan, Hunan, Liaoning, Sichuan, and Guangdong also show declines [9] 3.7 Pig Futures Prices - The closing prices of pig futures contracts 01, 03, 05, 07, 09, and 11 are 11,685, 11,360, 11,860, 12,465, 13,255, and 11,550 yuan/ton respectively, with no change on the day [10] 3.8 Pig Price Spreads and Basis - Spreads and basis such as LH01 - 03, LH03 - 05, etc., show different degrees of change, with LH01 - 03 down 22.62%, LH03 - 05 up 3.09%, etc [16]

Report Overview - Report Title: Nanhua Futures Daily Report on Risk Management of Pig Enterprises - Date: October 28, 2025 - Analyst: Dai Hongxu (Investment Consulting License No.: Z0021819) - Investment Consulting Business Qualification: CSRC License [2011] No. 1290 [1] 1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints - Policy disturbances may affect the long - term supply of pigs, and a long - term strategic bullish view is possible, but the short - to - medium - term situation is still based on fundamentals. The policy bottom has emerged, but the market bottom may take a production cycle to form. Currently, the supply exceeds demand, and short - term pig prices dropped rapidly due to concentrated slaughter during the double festivals. With the arrival of the peak season, demand will improve, and there may be a structural shortage of large pigs, supporting peak - season prices [3] 3. Key Points by Section 3.1 Pig Price Range Forecast - The predicted price range of the main contract is 11,000 - 13,500. The current 20 - day rolling volatility is 24.72%, and its historical percentile over 3 years is 76.74% [2] 3.2 Pig Enterprise Risk Management Strategy Suggestions 3.2.1 Inventory Management - For high product inventory and fear of inventory impairment, strategies include short - selling live pig futures according to inventory to lock in profits, selling call options when there is no suitable futures price, and buying out - of - the - money put options if not wanting to miss potential price increases. The recommended ratio for short - selling futures and selling call options is 10% [2] 3.2.2 Procurement Management - For future procurement plans and fear of price increases, strategies include buying long - term pig contracts according to the procurement plan to lock in costs, selling put options when there is no suitable futures price, and buying out - of - the - money call options if not wanting to lock in profits early and expecting lower costs [2] 3.3 Core Contradictions - Policy disturbances may affect long - term pig supply. The policy bottom has appeared, but the market bottom needs time. The current supply exceeds demand, and short - term price drops were due to concentrated slaughter. With the peak season, demand will improve, and large pigs may be in short supply [3] 3.4利多解读 (Likely Positive Factors) - Macro - sentiment improvement boosts market confidence; the standard - to - fat pig price spread is at a high level; there is a medium - to - long - term policy expectation of reducing production capacity; the second - fattening pen occupancy rate is decreasing, and with low pig prices and fattening costs, speculative second - fattening is entering the market; group farms are reducing slaughter [6] 3.5利空解读 (Likely Negative Factors) - The inventory of breeding sows is still high; the inventory of large - scale enterprises is at a three - year high; downstream terminal consumption is weak [6][7] 3.6 Pig Spot Prices - The national average spot price is 12.44 yuan/kg, up 0.28 yuan or 2.3%. Prices in different regions such as Henan, Hunan, Liaoning, Sichuan, and Guangdong also showed increases [9] 3.7 Pig Futures Prices - The closing prices of different futures contracts (01, 03, 05, 07, 09, 11) showed different changes, with some rising and some falling. For example, the 01 contract closed at 12,160 yuan/ton, down 170 yuan or 1.38%, while the 11 contract closed at 12,095 yuan/ton, up 30 yuan or 0.25% [10] 3.8 Pig Futures Spreads and Basis - Different futures spreads (e.g., LH01 - 03, LH03 - 05) and basis (e.g., Henan - 01 contract) showed various changes in price and percentage [17]

Report Overview - Report Name: Nanhua Futures Daily Report on Risk Management of Pig Enterprises - Date: August 19, 2025 - Author: Dai Hongxu (Investment Consulting License No.: Z0021819) - Investment Consulting Business Qualification: CSRC License [2011] No. 1290 1. Report Industry Investment Rating - No information provided in the report. 2. Report's Core View - The current supply increase trend in the pig market is obvious, and both the industry and funds are aware of it. The futures market has priced in the expectation of oversupply. The fundamental situation remains one of oversupply, while policy expectations provide an opportunity for arbitrage to hedge risks [3]. 3. Summary by Relevant Catalogs 3.1 Pig Price Range Forecast - The strong support level for the main contract price is 13,400. The current 20 - day rolling volatility is 10.94%, and the historical percentile of the current volatility over 3 years is 0.75% [2]. 3.2 Pig Enterprise Risk Management Strategy Recommendations Inventory Management - For enterprises with high product inventory and concerns about inventory impairment, they can short - sell LH2511 pig futures at a recommended ratio of 20% to lock in finished - product profits, sell call options (either over - the - counter or exchange - traded) at a 20% ratio, and buy out - of - the - money put options [2]. Procurement Management - For enterprises with future procurement plans and concerns about rising raw material prices, they can buy pig forward contracts according to the procurement plan to lock in procurement costs, sell put options (either over - the - counter or exchange - traded) according to the procurement plan, and buy out - of - the - money call options [2]. 3.3 Core Contradictions - Frequent policy disturbances may affect the long - term supply of pigs. The supply increase trend is well - recognized, and the futures market has reflected the oversupply expectation. The fundamental situation is oversupply, and policy expectations offer an opportunity for arbitrage [3]. 3.4利多解读 - No information provided in the report. 3.5利空解读 - Positive factors: Improved macro - sentiment boosts market confidence, the standard - fat price spread is at a relatively high level in the same period of history, and there is a medium - to - long - term expectation of production capacity reduction from the policy side [5]. - Negative factors: The inventory of breeding sows remains high, the inventory of large - scale enterprises is at a three - year high, the slaughter volume of slaughtering enterprises remains high with losses in slaughtering profit, and downstream terminal consumption is weak [5]. 3.6 Pig Spot Prices - The national average pig spot price is 13.62 yuan/kg, with a daily increase of 0.01 yuan and a growth rate of 0.07%. Prices vary by region, such as 13.63 yuan/kg in Henan (up 0.04 yuan, 0.29%), 13.65 yuan/kg in Hunan (down 0.02 yuan, - 0.15%), etc. [8]. 3.7 Pig Futures Prices - The closing prices of different pig futures contracts are as follows: Pig 01 is 14,200 yuan/ton, Pig 03 is 13,330 yuan/ton, Pig 05 is 13,810 yuan/ton, Pig 07 is 14,260 yuan/ton, Pig 09 is 13,780 yuan/ton, and Pig 11 is 13,900 yuan/ton, all with no daily change [9]. 3.8 Pig Price Spreads and Basis - For example, the spread of LH01 - 03 is 870 yuan/ton, down 20 yuan (- 2.25%); the basis of Henan - 01 contract is - 570 yuan/ton, with no change [17][19].

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - Policy disturbances may affect the future supply of live pigs. Although the fundamentals are still in a situation of oversupply, the policy expectations provide an opportunity for arbitrage to hedge risks [3] - There are both positive and negative factors in the live pig market. Positive factors include improved macro - sentiment, a high standard - fat price difference, and medium - to - long - term policy - driven capacity reduction expectations. Negative factors include a high inventory of sow stocks, high inventory of large - scale enterprises, high slaughter volume with losses in slaughter profits, and weak downstream consumption [4][5] 3. Summary by Relevant Catalogs 3.1 Pig Price Forecast and Risk Management - The strong support level for the main contract price is 13,400, with a current volatility (20 - day rolling) of 10.94% and a current volatility historical percentile (3 - year) of 0.75% [2] - For inventory management when product inventory is high, strategies include shorting live pig futures (LH2511, sell 20%), selling call options (20%), and buying out - of - the - money put options [2] - For procurement management when there are future procurement plans, strategies include buying live pig forward contracts according to the procurement plan, selling put options according to the procurement plan, and buying out - of - the - money call options [2] 3.2 Pig Spot and Futures Prices - Spot prices vary by region. The national average is 13.72 yuan/kg, with a daily increase of 0.02 yuan and a growth rate of 0.15%. Prices in different regions show different changes [8] - Futures prices of different contracts (pig 01, 03, 05, 07, 09, 11) remain unchanged on the day [9] 3.3 Pig Price Spreads and Basis - Different contract spreads and basis show various changes, such as LH01 - 03 with a spread of 835 yuan, a decrease of 65 yuan, and a decline rate of 7.22% [17] - Seasonal charts of basis and spreads for different contracts are provided, including pig 01, 03, 05, 07, 09, 11 contracts [10][16][19] 3.4 Dalian Commodity Exchange Pig Warehouse Receipt Inventory - Seasonal data of Dalian Commodity Exchange pig warehouse receipt inventory is presented [27]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core Viewpoints - Policy - end disturbances may affect the long - term supply of live pigs. Although the fundamentals show an oversupply situation, the policy expectations offer an opportunity for arbitrage to hedge risks [3]. - There are both positive and negative factors in the live pig market. Positive factors include improved macro - sentiment boosting market confidence and a high historical standard - fat price spread. Negative factors involve a high inventory of breeding sows, high inventory of large - scale enterprises, high slaughter volume with losses in slaughter profits, and dull downstream consumption [4][5]. 3. Summary by Relevant Catalogs 3.1 Price Forecast - The strong support level for the main contract price is 13,400. The current 20 - day rolling volatility is 10.94%, and its historical percentile over three years is 0.75% [2]. 3.2 Risk Management Strategies - **Inventory Management**: For enterprises with high product inventory worried about inventory impairment, strategies include short - selling live pig futures (LH2511) at a recommended ratio of 20%, selling call options, and buying out - of - the - money put options [2]. - **Procurement Management**: For enterprises with future procurement plans worried about price increases, strategies include buying long - term live pig contracts according to the procurement plan, selling put options, and buying out - of - the - money call options [2]. 3.3 Spot and Futures Prices - **Spot Prices**: The national average live pig spot price is 13.65 yuan/kg, down 0.02 yuan (- 0.15%). Prices in different regions vary, with prices in Henan rising 0.02 yuan (0.15%) to 13.68 yuan/kg, and prices in other regions either stable or slightly down [8]. - **Futures Prices**: Closing prices of various live pig futures contracts on the day remained unchanged, with no price fluctuations [9]. 3.4 Spreads and Basis - **Spreads**: Spreads between different futures contracts show various changes. For example, the spread of LH01 - 03 is 1,005 yuan, up 25 yuan (2.55%), while the spread of LH03 - 05 is - 540 yuan, up 25 yuan (- 4.42%) [17][19]. - **Basis**: The basis between the Henan spot price and different futures contracts also shows different changes. For example, the basis of Henan - 01 contract is - 745 yuan, down 40 yuan (5.67%) [19].