Core Insights - The Chinese pig industry in 2025 is characterized by high capacity adjustments and a reshaping of regional patterns, with the breeding sow inventory reaching a five-year high [1][2] - The trend of pig transportation has shifted from "North pigs South" to "South pigs North," with southern regions continuing to dominate supply while northern provinces gradually recover their capacity [2][5] Group 1: Breeding Sow Inventory - The breeding sow inventory is projected to reach a near five-year high by the end of September 2025, with a total of 9.0629 million heads, reflecting a year-on-year increase of 4.45% [1] - The inventory trend in 2025 shows an initial increase followed by a decrease, influenced by high breeding profits in the first half and a subsequent slowdown in expansion due to declining pig prices [1] Group 2: Transportation Patterns - The transportation pattern of pigs has evolved, with southern regions increasingly supplying the market while northern regions like Shandong are seeing a recovery in local production [2] - The implementation of new regulations for cross-province transportation in September 2025 is expected to raise costs and suppress long-distance transport, thereby enhancing regional supply-demand balance [2][5] Group 3: Future Outlook - The "South pigs North" transportation characteristic is anticipated to continue into 2026, with southern provinces maintaining their dominant supply position and ongoing pressure on outflows from provinces like Sichuan and Guangdong [5] - The new transportation regulations are likely to lead to a more stable overall transportation structure, focusing on internal supply-demand balance across regions [5]

1. Report Industry Investment Rating No relevant information provided. 2. Core Views of the Report - Spot prices are expected to fluctuate weakly. Based on sow and piglet data, there may still be a slight increase in hog slaughter volume by December, and with ample supply, it's difficult for hog prices to rise significantly and continuously. The fat - standard price difference exists, which may enhance farmers' willingness to increase weight. If the price weakness persists, a negative cycle may form, and if so, hog prices are expected to rebound at the end of the year. One could consider a reverse spread of the 11 - 01 contract [1]. 3. Summary by Related Catalogs 3.1 Futures End - **主力合约基差情况**: Affected by the weak performance of the spot market, this week's futures prices fluctuated weakly [2]. - **各合约价格变化情况**: The prices of far - month contracts fluctuated and adjusted [5]. - **月间价差变化**: The inter - month spreads fluctuated and adjusted. With the weakness of the spot market, the 11 - 01 contract showed a reverse spread trend [7][10]. 3.2 Spot End - **猪价与宰量**: This week, the slaughter volume increased steadily, and hog prices fluctuated weakly [13]. - **区域价差**: Regional price differences were relatively reasonable [15]. - **肥标价差**: The fat - standard price difference fluctuated and adjusted. Attention should be paid to whether the fat - standard price difference can strengthen after the weather turns cool, which may enhance the weight - increasing willingness of scattered farmers if it does [17]. - **鲜销与毛白价差**: Terminal consumption was relatively stable year - on - year [19]. - **相关产品比价与鲜冻价差**: The cost - effectiveness of pork was average. The fresh - frozen price difference of No. 2 meat weakened, and the cost - effectiveness of frozen products was lower than that of fresh products [21]. - **养殖利润**: Self - breeding and self - raising still had profits, while purchasing piglets for fattening was in a slight loss state [23]. - **出栏体重**: The average slaughter weight increased this week [25]. 3.3 Capacity End - **能繁母猪存栏量**: According to Ministry of Agriculture data, the national inventory of reproductive sows at the end of July was 40.42 million, with a month - on - month and year - on - year increase of 0.0%. Yongyi Consulting data showed that in August, the inventory of reproductive sows in its sample 1 increased by 0.02% month - on - month, compared with 0.14% in the previous month. Mysteel data showed that in August, the inventory of reproductive sows in its sample large - scale enterprises decreased by 0.83% month - on - month, compared with an increase of 0.01% in the previous month [27]. - **母猪淘汰情况**: This week, the price of culled sows showed a weak trend. The slaughter volume of culled sows increased month - on - month in August, indicating an increase in the market's enthusiasm for capacity reduction [29]. - **母猪生产效率与新生健仔数**: In August, the number of healthy newborn piglets increased by 0.15% month - on - month (previous value: + 0.06%), corresponding to an overall fluctuating increase in the volume of hogs to be slaughtered in February next year (calculated based on a 6 - month fattening period) [31]. - **母猪、仔猪补栏积极性**: This week, the price of 15 - kg piglets was stable with a weak trend, and the price of 50 - kg binary sows was weak [33]. 3.4 Slaughter End - The slaughter volume continued to increase month - on - month. According to Ministry of Agriculture data, the slaughter volume of designated enterprises in July was 31.66 million, a month - on - month increase of 5.3% and a year - on - year increase of 30.4%. In terms of frozen products, the market will gradually enter the de - stocking stage, and its impact on hog prices will change from positive to neutral - negative [35]. 3.5 Import End - In August 2025, the pork import volume was about 80,000 tons, a decrease of about 7,600 tons compared with the previous month. Currently, the scale of pork imports is limited, and its impact on domestic hog prices is relatively limited [38].

Core Viewpoint - The inventory of breeding sows in China has shown stable growth, indicating a normal production capacity within the industry, as reflected in the recent data from the Ministry of Agriculture and Rural Affairs. Group 1: Breeding Sow Inventory Data - As of the end of May 2025, the breeding sow inventory reached 40.42 million heads, with a month-on-month increase of 0.1% and a year-on-year increase of 1.2%, representing 103.6% of the normal holding capacity, indicating normal production capacity [1] - As of the end of April 2025, the breeding sow inventory was 40.38 million heads, remaining flat month-on-month and showing a year-on-year increase of 1.3%, also at 103.6% of the normal holding capacity [1] - At the end of Q1 2025, the breeding sow inventory stood at 40.39 million heads, with a month-on-month decrease of 0.1% and a year-on-year increase of 1.2%, maintaining 103.6% of the normal holding capacity [1] - By the end of February 2025, the breeding sow inventory was 40.66 million heads, with a month-on-month increase of 0.1% and a year-on-year increase of 0.6%, at 104.3% of the normal holding capacity [1] - At the end of January 2025, the breeding sow inventory was 40.62 million heads, showing a month-on-month decrease of 0.4% and a year-on-year decrease of 0.1%, representing 104.2% of the normal holding capacity [1]

Group 1: Report Summary - The report is a weekly analysis of the pig market, covering price trends, supply and demand, and trading strategies [1][4] Group 2: Investment Ratings - Not provided Group 3: Core Views - Pig prices across China showed a downward trend this week due to improved supply after a previous price surge and weak price support [4] - Supply remains relatively tight as large - scale enterprises' output has not fully recovered, but it has improved compared to the previous period [4][9] - Demand is generally weak, with a decline in pig slaughter volume and an increase in frozen product inventory [4][10] - Futures prices are expected to have limited rebound space due to limited supply tightening [4] Group 4: Comprehensive Analysis and Trading Strategies Comprehensive Analysis - Pig prices are expected to be range - bound, and futures prices will have limited upward potential [4] Trading Strategies - Unilateral trading: Mainly range - bound operation [5] - Arbitrage: LH91 positive spread [5] - Options: Wait and see [5] Group 5: Pig Price Situation - Pig prices across the country decreased this week. For example, in the Northeast, prices dropped by 0.35 - 0.5 yuan/kg to 14.38 - 14.5 yuan/kg [9] - Supply from large - scale enterprises has not fully recovered, but it has improved after a previous price rebound, leading to a slight price decline [9] Group 6: Changes in Slaughter and Consumption Slaughter Situation - Large - scale enterprises' output has not fully returned to normal, and the monthly output increase is limited [10] - Small - scale farmers' slaughter enthusiasm has increased, but the output remains low, and secondary fattening output has decreased [10] - Pig slaughter weight has increased slightly, and the supply of large - weight pigs is still tight [10] Consumption Situation - Pig market demand is generally weak, with a decline in slaughter volume and an increase in frozen product inventory [10] Group 7: Breeding Profits - Pig breeding profits continued to improve. As of the week of July 11, self - breeding and self - raising profit was 133.87 yuan/head, up 14.15 yuan/head, and the profit from purchasing piglets was 31.6 yuan/head, up 57.86 yuan/head [15] Group 8: Sow and Piglet Prices Piglets - The price of 7 - kg piglets rose to 439 yuan/head, up 8 yuan/head, and the price of 15 - kg piglets rose to 539 yuan/kg, up 12 yuan/head. Farmers' enthusiasm for replenishing piglets has increased [19] Sows - The sow price remained flat at 1621 yuan/head. The ratio of culled sows to commercial pigs has decreased, and the market's enthusiasm for culling has increased, while the enthusiasm for replenishment is still low [19] Group 9: Reproductive Sow Inventory - In June, the reproductive sow inventory increased slightly according to both Yongyi and Ganglian data. Yongyi's comprehensive sample increased by 0.12% and large - scale enterprises by 0.22%, while Ganglian's data showed a 0.28% increase overall, with large - scale enterprises up 0.29% and small and medium - sized farmers up 0.17% [21]

Group 1: Core Logic of the Pig Cycle - The core logic chain of changes in the breeding sow inventory is summarized as: breeding profit fluctuations → capacity adjustment decisions (restocking/elimination) → changes in breeding sow inventory → piglet supply → future adjustments in pig supply → cyclical price fluctuations [2][3] - The essence of the pig cycle is the lagged transmission between breeding sow inventory and pig prices, rooted in the long production cycle characteristics and supply-demand mismatches [3][4] Group 2: Theoretical Lag and Practical Verification - The complete production chain from restocking breeding sows to market pigs takes 10-13 months, with significant negative correlation (r=-0.75) between breeding sow inventory and pig prices 13 months later [5][6] - Historical data shows that each round of breeding sow reduction is typically over 8%, which is sufficient to support a new price increase cycle [8] Group 3: 2025 Pig Production Capacity Outlook - As of January 2025, the national breeding sow inventory is 40.62 million heads, slightly down month-on-month but up 0.8% year-on-year, exceeding the normal inventory level [10] - The main trend for 2025 is expected to be simultaneous capacity expansion and structural adjustment, with leading companies continuing to increase output while low-efficiency capacity is being eliminated [10][11]