Investment Rating - Industry rating: Recommended [4] Core Viewpoints - The report indicates that both active and passive capacity reduction in the pig farming industry is expected to lead to an upward shift in the medium to long-term price center for pigs [11][12] - The supply-demand dynamics for grains are improving, with overall grain prices showing signs of recovery [20][24] Summary by Sections Pig Farming Industry - According to data from Pig Easy, the prices for pigs in Q1, Q2, and Q3 of 2025 are projected to be 15.06, 14.53, and 14.02 yuan per kilogram, reflecting year-on-year changes of +4.26%, -10.78%, and -28.22% respectively [11] - The report highlights that in the past 36 weeks, external piglet farming has only been profitable for 8 weeks, with an average loss of 58.50 yuan per head as of the third week of September [12] - In contrast, self-breeding and self-raising farming has been profitable for 35 weeks, with an average profit of 63.69 yuan per head [12] - The report suggests that the current average price of pigs has fallen below 13 yuan per kilogram, leading to losses for some farmers and initiating a proactive capacity reduction in the industry [12] Grain Industry - Since the beginning of 2025, prices for corn, wheat, soybeans, and japonica rice have shown significant recovery, with corn prices rising due to a decrease in imports and increased demand from pig farming [20] - For corn, the domestic spot prices in Q1, Q2, and Q3 of 2025 are 2196.63, 2348.12, and 2393.15 yuan per ton, with year-on-year changes of -10.69%, -3.50%, and -0.32% respectively [20] - Wheat prices have also shown a recovery trend, with Q1, Q2, and Q3 prices at 2410.83, 2444.25, and 2436.90 yuan per ton [22] - The report notes that the overall recovery in grain prices is expected to improve the supply-demand balance in the future [24] Investment Recommendations - The report recommends focusing on the agricultural sector, particularly in pig farming, where the price center is expected to rise due to policy guidance and industry restructuring [3] - Specific companies to watch include Lihua Co., Dekang Agriculture, Jingji Zhino, and Muyuan Foods in the pig farming sector [3][6] - For grain-related investments, companies with strong cost control such as Haida Group are highlighted as potential beneficiaries [6]