1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - From the number of piglet births, the pattern of increasing theoretical slaughter volume in the later period remains unchanged. Considering the impact of pig diseases around February, the slaughter growth rate in August may be relatively low, while the growth rates in October and November are relatively high. With the increase in graduation banquets in August and pre - stocking for the start of school in early September, demand will increase significantly in August. After September, terminal consumption will have a seasonal rebound. Supported by the low slaughter growth rate and increased consumption in August, the spot price is expected to rise again and reach the annual high, followed by an expected shock adjustment, but the adjustment space is limited due to the policy - guided reduction of the average slaughter weight [1][21] - LH2509 and LH2511 have a high premium over the spot, which has fully priced in the later spot price increase, so shorting on rallies can be considered [1][21] 3. Summary by Relevant Catalogs 3.1 Market Review - In July, the spot market of live pigs declined. The spot price in the benchmark Henan region dropped from the high of 15.34 yuan/kg at the beginning of the month to around 14.3 yuan/kg, a decline of nearly 1 yuan. Futures performed stronger than the spot, causing the basis to weaken rapidly. The futures price has turned to a premium of nearly 1000 yuan/ton compared to the spot in Sichuan Province. The decline in the live pig market was mainly due to the reduction of supply by large - scale farms at the beginning of the month, followed by the resumption of their supply, increased willingness of small - scale farmers to sell pigs due to hot weather, and weak consumption. The strong performance of futures comes from seasonal expectations and policy expectations [3] 3.2 Live Pig Supply and Demand Analysis 3.2.1 Continued Increase in Theoretical Slaughter Volume Indicated by Data of Sows and Piglets - The national inventory of reproductive sows reached a low of 39.86 million in May 2024, then rebounded to a high of 40.8 million in November 2024, with an increase of 2.4% from the low to the high. As of June 2025, it was 40.42 million, equivalent to 103.6% of the normal inventory. From the data of reproductive sows, the supply potential of commercial pigs will gradually increase from February to September 2025. The number of piglet births in sample enterprises has generally been increasing since November 2024, indicating that the domestic live pig supply is still guaranteed during the traditional seasonal rise window period from July to September 2025 [4] 3.2.2 Feed Sales Data Confirm the Increase in Live Pig Inventory - From October 2024 to January 2025, the sales volume of piglet feed and nursery feed decreased seasonally, but the decline was significantly lower than in previous years, indicating that piglets were less damaged in winter. The sales volume of finishing pig feed increased significantly month - on - month in March 2025, earlier than in previous years. The year - on - year growth rates of finishing pig feed sales volume from May to June were 17% and 9% respectively, indicating an obvious recovery in the inventory of medium - and large - sized pigs and relatively sufficient slaughter volume in the next 2 - 3 months [8] 3.2.3 Accelerated Slaughter of Heavy - Weight Pigs Later, but Unlikely to Cause Concentrated Selling Pressure - The average weight of slaughtered pigs in 16 key provinces reached the peak in May and then declined, with an accelerated decline in June and July, and is currently at the lowest level in the past 5 years. The decline is due to the increase in temperature and government policies. Seasonally, the price difference between fat and standard pigs will gradually increase after August, and the demand for fat pigs will increase seasonally. With the current low average weight, there is a large space for the industry to increase the average weight in the later period [10] 3.2.4 Short - Term Demand Boosted by Festivals, but No Highlights in the Medium Term - The national pig slaughter volume has increased significantly compared with the previous year, and the slaughter gross profit in 2025 has been significantly higher than that in the previous year, indicating better demand this year. The reasons may be the improvement of overall terminal consumption and the reduction of the impact of frozen products. In August, demand will increase significantly due to graduation banquets and pre - stocking for the start of school. After September, terminal consumption will have a seasonal rebound, but the impact on price depends on the matching degree of future supply [13] 3.2.5 Feed Cost Reduction Benefits the Industry, Maintaining Profitability - The domestic live pig industry has maintained profitability for nearly 14 months since May 2024. Although the pig price was low in the first half of 2025, the industry still made a profit due to the reduction of feed costs. The price of piglets has been rising since January, and the cost of fattening pigs from purchased piglets will increase significantly. The theoretical cost of fattening pigs from self - bred piglets is concentrated in the range of 13 - 13.5 yuan/kg, while the cost of fattening pigs from purchased piglets will rise to the range of 15 - 16 yuan/kg. It is expected that the feed cost is likely to rise and difficult to fall, and the decline space of live pig breeding cost is limited [19] 3.3 Conclusion and Market Outlook - The pattern of increasing theoretical slaughter volume in the later period remains unchanged. Considering the impact of pig diseases around February, the slaughter growth rate in August may be relatively low, while the growth rates in October and November are relatively high. The large - scale groups are accelerating the reduction of the average slaughter weight, which may reduce the slaughter pressure in August, but small - scale farmers have a large number of heavy - weight pigs in stock. Supported by the low slaughter growth rate and increased consumption in August, the spot price is expected to rise again and reach the annual high, followed by an expected shock adjustment, but the adjustment space is limited. LH2509 and LH2511 have a high premium over the spot, so shorting on rallies can be considered [1][21]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core Viewpoint The report suggests that the price of live pigs will be in a weak and volatile state. The main reasons are that the supply of live pigs will be abundant from the second to the fourth quarter of 2025, and the demand in the second and third quarters will not strongly support the price increase. Although the spot price may reach a new low, the price of the 09 contract is considered to be in a relatively reasonable range, and it is recommended to wait and see for now [4]. 3. Summary by Directory 3.1 Market Dynamics - On June 10, the registered warehouse receipts of live pigs were 525 lots [2]. - The LH2507 contract is mainly based on the regression of futures and spot prices and the game of delivery. The far - month contracts are affected by the decline of spot prices and the expected increase in subsequent slaughter volume, showing a weak and volatile trend [2]. - The main contract (LH2509) reduced its position by 1,258 lots today, with a position of about 78,600 lots. The highest price was 13,505 yuan/ton, the lowest price was 13,350 yuan/ton, and the closing price was 13,475 yuan/ton [2]. 3.2 Fundamental Analysis - From the perspective of the inventory of fertile sows, the supply of live pigs is expected to increase month - by - month from March to December, but the increase is limited. According to the piglet data, the slaughter volume of live pigs will generally increase in the second and third quarters of 2025. The first half of the year is the off - season for demand, while the second half is the peak season [3]. - Based on historical situations and current fundamentals, the fat - standard price difference may fluctuate and adjust [3]. - The bearish logic in the market includes: the farming side has not yet reduced the weight of pigs, which is actually bearish for the future market; the subsequent slaughter volume is expected to continue to increase; the second and third quarters are not the peak consumption seasons, and the demand support for pig prices is limited. The bullish logic includes: there is still room for an increase in frozen product inventory, which can support pig prices; the spot price is firm, indicating that the supply - demand relationship is not as loose as the bears think; although there will be an increase in subsequent slaughter, the increase is limited, and the third and fourth quarters are gradually entering the peak consumption season for live pigs [3]. 3.3 Strategy Suggestion - The view is that the market will be weak and volatile [4]. - The core logic is that from the data of sows and piglets, the slaughter volume of live pigs will be sufficient in the second, third, and fourth quarters of 2025, and there is no basis for a significant increase in pig prices. The demand support for pig prices in the second and third quarters is weak, and it is difficult to support a significant increase in pig prices. If there is a concentrated and significant weight reduction in June and July, pig prices may reach a new low. Although the spot price may reach a new low, due to the high uncertainty and the fact that the current weight reduction is actually beneficial to the 09 contract, it is considered that the price of the 09 contract is currently in a relatively reasonable range, and it is recommended to wait and see [4]. 3.4 Market Overview - On June 10, the national average live pig slaughter price was 14.01 yuan/kg, an increase of 0.09 yuan/kg or 0.65% compared with the previous day. The average slaughter price in Henan was 14.13 yuan/kg, an increase of 0.22 yuan/kg or 1.58%. The average slaughter price in Sichuan was 13.84 yuan/kg, an increase of 0.1 yuan/kg or 0.73% [6]. - Among the futures prices, the prices of most contracts increased, with the 07 contract increasing by 1.19% and the 09 contract increasing by 0.89%, while the 11 contract decreased by 0.08% [6]. - The main contract basis in Henan increased by 100 yuan/ton or 22.99% to 535 yuan/ton [6]. 3.5 Key Data Tracking The report provides data charts on the closing prices of futures contracts in the past 180 days, the basis of the main live pig contract in the Henan region, the price difference between the 09 - 11 contracts, and the price difference between the 11 - 01 contracts [14].