1. Report Industry Investment Rating There is no information about the report industry investment rating in the provided content. 2. Core Views of the Report - **Soybean Oil**: The price of soybean oil broke through and rose this week. The market is worried about the supply of oilseeds in the fourth quarter. The soybean oil market is in a "weak reality + strong expectation" pattern. The 01 contract of soybean oil may continue to rise based on the 8400 level. It is recommended to hold long positions in the main 01 contract, consider 1 - 5 positive spread operations [3]. - **Rapeseed Oil**: China's temporary anti - dumping measures on imported Canadian rapeseed initially pushed up the price of rapeseed products. However, the import of rapeseed from other countries has alleviated supply concerns, and the price has fallen from its high. The price of palm oil provides some support, and the price is expected to fluctuate in the short term [3]. - **Palm Oil**: The high - frequency data shows poor production of Malaysian palm oil. The export of Malaysian palm oil from August 1 - 15 increased by 21.3% month - on - month. The replenishment demand of importing countries supports the price. There are potential positive factors for the price, and it is recommended to hold long positions [4]. - **Soybean Meal and Soybean No. 2**: The price of soybean meal broke through and rose. The situation of Sino - US trade remains severe, and there is an expectation of tight supply of soybeans for oil extraction in the fourth quarter. The 09 contract of soybean meal is expected to be strong, and long positions can be held. The 09 contract of soybean No. 2 is expected to fluctuate and adjust [3][4]. - **Rapeseed Meal**: After the change in trade policy, the price of rapeseed meal first rose and then fell. The supply can be partially supplemented by imports from other countries, and the demand is weak. The price is expected to stop falling and fluctuate [3][4]. - **Soybean No. 1**: The price of soybean No. 1 oscillated at a low level this week. The price in the Northeast is stable, but there is a downward expectation. New soybeans in Hubei are gradually on the market, and it is recommended to try short positions with a light position [5]. - **Peanut**: The inventory of peanuts in the producing areas is low, and the import volume is small. The new - season planting area has increased, and there is an expectation of a bumper harvest. It is recommended to short the 11 and 01 contracts on rebounds [6]. - **Corn and Corn Starch**: The futures prices continued to be weak this week. The external market is under pressure, and the domestic market also has supply pressure. It is recommended to hold short positions cautiously and consider option strategies such as selling wide - straddle combinations or out - of - the - money call options [7]. - **Pig**: The spot price of pigs was weakly volatile and generally stable over the weekend. Terminal consumption is expected to improve in late August. The futures price of far - month contracts rebounded after rising. It is recommended that aggressive investors hold long positions in the 2511 or 2601 contracts and buy the 2605 contract on dips [8][9]. - **Egg**: The spot price of eggs rebounded with fluctuations over the weekend. The current inventory is high, and the seasonal peak season in August needs further confirmation. It is recommended to buy the 10 or 11 contracts on dips and pay attention to the 11 - 1 spread [9]. 3. Summary According to Relevant Catalogs 3.1 First Part: Sector Strategy Recommendations 3.1.1 Market Analysis | Sector | Variety | Market Logic (Supply - Demand) | Support Level | Resistance Level | Market Judgment | Reference Strategy | | --- | --- | --- | --- | --- | --- | --- | | Oilseeds | Soybean No. 1 11 | Northeast soybean sentiment cools, new soybeans in Hubei are on the market, price expected to fall steadily | 3900 - 3930 | 4145 - 4150 | Oscillatory decline | Try short positions with a light position | | | Soybean No. 2 09 | Sino - US trade situation is severe, import cost rises, fewer purchases in the fourth quarter | 3640 - 3670 | 3950 - 4000 | Oscillatory strength | Temporarily wait and see | | | Peanut 11 | Low old - season inventory, increased new - season area, reduced cost | 7500 - 7600 | 8100 - 8162 | Oscillatory decline | Hold short positions | | Oils | Soybean Oil 01 | Fewer soybean purchases in the fourth quarter, expected tight supply in the future | 8230 - 8300 | 8880 - 9000 | Oscillatory rise | Hold long positions | | | Rapeseed Oil 01 | Fewer rapeseed purchases, increased imports from alternative countries | 9600 - 9610 | 10290 - 10333 | Oscillatory adjustment | Temporarily wait and see | | | Palm Oil 01 | Good export demand in the origin, concerns about Indonesian production | 9050 - 9074 | 9990 - 9990 | Oscillatory strength | Hold long positions | | Proteins | Soybean Meal 09 | Sino - US trade situation is severe, fewer soybean purchases in the fourth quarter, good expectation | 2950 - 2980 | 3200 - 3250 | Oscillatory strength | Hold long positions | | | Rapeseed Meal 01 | Fewer rapeseed purchases, increased imports from alternative countries, weak demand | 2431 - 2460 | 2698 - 2708 | Oscillatory adjustment | Temporarily wait and see | | Energy and By - products | Corn 11 | Imported corn auctions continue, new - season is under pressure, short - term price continues to seek the bottom | 2150 - 2160 | 2240 - 2250 | Oscillatory weakness | Hold short positions cautiously | | | Starch 09 | Corn price at the cost end is under pressure, spot supply remains loose | 2590 - 2600 | 2720 - 2730 | Oscillatory weakness | Hold short positions cautiously | | Livestock | Pig 11 | Feed price stops falling and rebounds, industry has capacity - reduction policy | 13000 - 13500 | 14500 - 15000 | Oscillatory rebound | Hold long positions | | | Egg 10 | Capacity pressure + consumption peak - season expectation | 3200 - 3300 | 3600 - 3700 | Oscillatory bottom - seeking | Buy on dips | [12] 3.1.2 Basis and Spot - Futures Strategies The report provides the spot prices, price changes, and basis data of various varieties in different sectors, including oilseeds, oils, proteins, energy and by - products, and livestock [13][14]. 3.2 Second Part: Key Data Tracking Table 3.2.1 Oilseeds and Oils - **Daily Data**: It includes the import cost data of soybeans, rapeseeds, and palm oil from different origins and shipping periods, such as the CNF price, import duty - paid price, and cost of soybean meal or rapeseed meal when the crushing profit is zero [14][15]. - **Weekly Data**: It shows the inventory and operating rate data of various oilseeds and oils, such as the inventory of soybeans, rapeseeds, palm oil, peanuts, and the operating rate of soybean oil, rapeseed oil, and peanut oil production [16]. 3.2.2 Feed The report provides the weekly data of corn and corn starch, including the consumption, inventory, operating rate, and inventory of deep - processing enterprises [16]. 3.2.3 Livestock - **Pig**: It provides the weekly data of the pig market, including spot prices, breeding costs, profits, slaughter data, and other indicators [17]. - **Egg**: It provides the weekly data of the egg market, including supply - side data (production rate, inventory, etc.), demand - side data (inventory), and profit data [18]. 3.3 Third Part: Fundamental Tracking Charts - **Livestock (Pig and Egg)**: It includes charts of the closing prices of pig and egg futures contracts, spot prices, and related data [20][21][22][23][25][26][27]. - **Oilseeds and Oils**: It includes charts of the production, export, inventory, and other data of palm oil, soybean oil, and peanuts [29][36][43]. - **Feed**: It includes charts of the prices, basis, inventory, consumption, and profit data of corn, corn starch, rapeseed, and soybean meal [47][55][63][69]. 3.4 Fourth Part: Options Situation of Feed, Livestock, and Oils The report provides charts of the historical volatility of various varieties and the trading volume, open interest, and put - call ratio of corn options [70][75][76]. 3.5 Fifth Part: Warehouse Receipt Situation of Feed, Livestock, and Oils The report provides charts of the warehouse receipt quantity of various varieties, including rapeseed meal, rapeseed oil, soybean oil, palm oil, peanuts, corn, corn starch, pig, and egg [81][82][83][84][89][91]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $21.2 billion, with an operating profit of $1.9 billion and an operating margin of 8.8% [9][30] - Average daily volume in the U.S. declined by 7.3%, while revenue declined by only 0.8% due to strategic actions taken [12][30] - Diluted earnings per share were reported at $1.55 [30] Business Line Data and Key Metrics Changes - U.S. Domestic segment revenue was $14.1 billion, down slightly year-over-year, primarily due to a decline in Amazon revenue [35] - International segment revenue increased to $4.5 billion, up 2.6% year-over-year, despite a 34.8% decline in the China to U.S. trade lane [41] - Supply Chain Solutions revenue fell to $2.7 billion, down $594 million year-over-year, with healthcare logistics growing by 5.7% [42] Market Data and Key Metrics Changes - U.S. consumer sentiment was near historic lows, impacting the small package market negatively [10] - The China to U.S. trade lane saw a significant drop in volume due to increased tariffs, while trade lanes from China to the rest of the world increased by 22.4% [15][39] - SMBs represented 32% of total U.S. volume, showing a 230 basis point improvement compared to last year [33] Company Strategy and Development Direction - The company is focused on reducing costs by approximately $3.5 billion this year through efficiency initiatives and network reconfiguration [19][44] - The strategic priority includes growing the international small package business and enhancing healthcare logistics capabilities [16][22] - The company is actively engaging in supply chain mapping assessments to help customers navigate tariff uncertainties [15] Management's Comments on Operating Environment and Future Outlook - The management expressed concerns about the uncertain macroeconomic environment and its impact on customer demand, particularly for SMBs [24][57] - There is a focus on improving revenue quality and managing the decline in Amazon volume, with expectations for more clarity on tariffs and demand by the end of Q3 [62][64] - The company remains committed to a stable and growing dividend, supported by strong free cash flow [26] Other Important Information - The company is undergoing the largest network reconfiguration in its history, with 155 operations closed and plans for more closures in the second half of the year [44][47] - The attrition rate for employees was lower than expected, impacting cost savings initiatives [59][111] Q&A Session Summary Question: Is the lack of guidance a sign that things are worse? - Management indicated that the uncertainty in the market is the reason for not providing guidance, with volume in July showing some improvement but not necessarily indicative of future performance [53][54] Question: What is the outlook for SMBs given the current environment? - Management noted that SMBs are facing challenges due to trade uncertainties and tighter credit conditions, but UPS is helping them navigate these issues through supply chain mapping [86][87] Question: How is the company addressing competition from smaller parcel carriers? - Management emphasized that UPS's end-to-end network and capabilities set it apart from competitors, and the company gained market share despite a competitive environment [78][80]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.42, up 5% sequentially and comparable to the prior year, with strong free cash flow of nearly $190 million in the quarter [15][16] - Adjusted EBITDA margin was strong at 16.6%, up 20 basis points compared to the prior year [16] - Sales were down 1% on an organic basis compared to the prior year, primarily due to deflation-related price reductions [15][16] Business Line Data and Key Metrics Changes - Materials Group sales were down 1% on an organic basis, with high-value categories up low single digits and base business down low single digits [18][19] - Solutions Group sales were down 1% organically, with high-value categories up low single digits and base solutions down mid single digits [21] - The Solutions Group achieved an adjusted EBITDA margin of 17.1%, up 30 basis points compared to the prior year [22] Market Data and Key Metrics Changes - North America saw low to mid single-digit growth in organic volume mix, while Europe was down low to mid single digits [19] - Apparel sales were down 6% in the quarter, with overall apparel and general retail categories experiencing reduced orders and inventory levels [6][10] - Food and logistics categories showed strong growth, with food sales up mid-teens collectively [10][21] Company Strategy and Development Direction - The company is focused on leveraging its global scale, innovation, and go-to-market strategy to maintain competitive advantages in large growing markets [12][13] - There is an emphasis on expanding high-value categories and pursuing new projects in food and logistics [10][12] - The company plans to continue disciplined capital allocation, including share repurchases and dividends, while exploring M&A opportunities to enhance high-value category contributions [52][54] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the third quarter, expecting earnings per share to be comparable to the prior year amid trade policy uncertainties [12][15] - The company anticipates a normalization of growth in apparel and general retail categories over time, despite current softness [10][11] - Management remains confident in the long-term growth trajectory, particularly in high-value categories and emerging markets [13][72] Other Important Information - The company announced a 7% increase in its quarterly dividend to $0.94 per share, continuing a decade-long trend of annual dividend growth [17] - The company is actively managing its global network to reduce inefficiencies and associated costs due to shifts in trade policies [11] Q&A Session Summary Question: Can you speak to whether you see pent-up demand and potential quicker turnarounds in the second half? - Management noted continued retail sales volume softness in Europe and muted customer sentiment, with expectations of low single-digit demand in apparel and general retail overall [29][30] Question: What are your expectations for volumes in the back half of the year? - Management anticipates growth in Intelligent Labels in the third quarter and expects new programs to gain traction in the fourth quarter [38][42] Question: What impact do you expect from the closure of Kroger stores on your deployments? - Management stated that the rollout with Kroger continues as planned, with no significant impact from store closures on their deployments [78] Question: What are the expectations for growth in the Embellix business? - Management expects growth in the Embellix business to begin in the fourth quarter, driven by performance brands and upcoming sporting events [86][100] Question: How is the company managing tariff cost impacts? - Management indicated that they largely offset tariff-related costs in Q2 through strategic pricing and sourcing shifts, with expectations to continue this in Q3 [91][92]

Core Viewpoint - The Mexican peso has shown strong performance in the first half of the year, reaching its highest level in over ten months, but there are growing concerns about a potential moderate depreciation in the coming year due to upcoming U.S. tariff decisions [1][2]. Group 1: Current Performance and Predictions - The Mexican peso has appreciated by 13.2% in the first half of 2025, making it one of the strongest currencies in Latin America, with the exchange rate rising from over 20 to approximately 18.7 against the U.S. dollar [2]. - A median forecast from 22 foreign exchange experts indicates that the peso may depreciate by 5.5% over the next 12 months, with an expected exchange rate decline from 18.72 to 19.80 [2]. - Analysts predict that the peso will depreciate to 20.13 per dollar by the end of the year, reflecting a 7% decline from current levels, indicating a general expectation of weakening in the medium to long term [2]. Group 2: Market Concerns and Influencing Factors - Market concerns are heightened due to the impending expiration of the U.S. tariff freeze on July 9, which could lead to renewed trade tensions if tariffs are reinstated [2][3]. - Barclays Bank's foreign exchange strategist noted that the current market has not fully priced in the extreme risks associated with U.S. tariff policies, suggesting that the peso could face additional depreciation pressure in a worst-case scenario [3]. - The Mexican peso's valuation is at a high stage, and technical factors may exert downward pressure, prompting short-term investors to realize profits and potentially lower the exchange rate [3]. Group 3: Recent Trends and Support Factors - On July 4, despite low trading volumes due to the U.S. Independence Day holiday, the peso strengthened slightly, closing at 18.6297, marking a 0.18% increase from the previous trading day [4]. - The peso has appreciated by approximately 1.18% since last Friday, reaching its highest level since August of the previous year, supported by a weaker dollar and favorable conditions in the Mexican economy [4]. - Factors contributing to the peso's strong performance include a high-interest rate environment in Mexico, which attracts international capital, and the relatively mild trade regulations from the Trump administration [4].

Core Viewpoint - The copper market is experiencing volatility due to ongoing trade policy uncertainties, with a notable decline in the Copper Monthly Metal Index (MMI) by 4.23% from March to April, and analysts are struggling to navigate these changes [1] Trade Policy Uncertainty - Recent trade agreements between the US, China, and the UK have alleviated some concerns regarding tariffs, leading to renewed optimism about the global economy, although demand worries persist [1][3] - The uncertainty surrounding international trade policies may negatively impact global economic prospects and copper demand, with the International Copper Study Group (ICSG) adjusting its growth rate forecasts downward [2] Supply and Demand Outlook - The ICSG does not foresee significant supply issues, predicting a surplus in the copper market for 2025 and 2026, contrary to previous concerns about potential shortages [1][2] - The anticipated surplus for 2025 is expected to more than double compared to earlier estimates, providing a buffer for the market as trade policies evolve [2] Price Trends and Inventory Levels - Global copper inventories have increased in May, failing to support copper prices, with rising inventories indicating stable demand conditions despite fluctuations [4] - The correlation between inventory levels and copper prices is weak, but the increase in COMEX inventories, alongside rising SHFE stocks, has dampened bullish expectations for copper prices [4] Currency Influence - The US dollar index has stabilized, which typically inversely correlates with copper prices, exerting pressure on copper prices as the dollar recovers from previous declines [5] - Speculation about potential US dollar depreciation has increased, although US officials clarified that exchange rate policy is not part of ongoing trade negotiations [5][6] - The Federal Reserve has maintained a cautious stance on interest rate cuts, which could further impact the dollar and subsequently influence copper prices [6]

Core Viewpoint - The article discusses the rebound in the commodity market following the Geneva joint statement between China and the U.S., driven by demand recovery expectations and supply contractions in certain products [1]. Group 1: Demand Marginal Tracking - The demand increase in the 90-day tariff suspension period is attributed to the shipment of previously delayed orders and U.S. companies' potential actions to "rush imports and transshipments" [2]. - The recent rise in U.S. shipping prices indicates an increase in orders, which will sustain strong demand in the near term [2]. - For complex goods, the delivery process may not see significant growth in demand during the tariff suspension, while shorter delivery cycle products like textiles and toys may show increased purchasing by U.S. companies [4][5]. Group 2: Profit and Supply Decision Adjustments - Short-term supply changes have a greater impact on price elasticity, with maintenance and operational issues in PX and PTA providing upward momentum for chemical products [9]. - The actual pace of production recovery is constrained by large manufacturers' maintenance plans and strategic supply adjustments, which create price support independent of demand [10]. - Despite potential for rapid production increases in the upstream supply chain, the lack of significant demand growth and previous low-profit periods may limit the willingness of leading manufacturers to increase output [13]. Group 3: Trade Policy Uncertainty - The uncertainty surrounding U.S. trade policy remains a significant risk, with a potential increase in tariffs by 54% if no agreement is reached within 90 days [16]. - The U.S. fiscal issues may necessitate a focus on revenue generation and spending cuts, complicating trade negotiations and potentially leading to higher retail prices that suppress consumer demand [16]. - The Federal Reserve's monetary policy adjustments in response to economic conditions may also impact inflation expectations and commodity prices [17]. Group 4: Sector-Specific Insights - Precious metals may experience short-term price corrections due to tariff and geopolitical tensions but are expected to return to their roles as a store of value in the medium term [23]. - Non-ferrous metals may face short-term demand limitations due to U.S. procurement decisions during the tariff suspension, but medium-term trends will be influenced by Federal Reserve policies [23]. - The energy sector faces supply and demand pressures, with OPEC's production increases and limited demand support affecting price stability [23].

Financial Data and Key Metrics Changes - The investment portfolio grew by approximately $300 million or 21% from $1.5 billion to $1.8 billion [4] - Weighted average leverage in the investment portfolio decreased to 3.5 times, with non-accruals at fair value reduced from 2.3% to 1.7% [4][27] - Pre-tax net investment income was $28.5 million or $0.56 per share, with adjusted pre-tax net investment income at $31.3 million or $0.61 per share [26] - Total investment income increased to $52.4 million from $52 million in the prior quarter [26] - The company's NAV per share increased from $16.59 to $16.70 [30] Business Line Data and Key Metrics Changes - The credit portfolio ended the quarter at $1.6 billion, representing year-over-year growth of 19% from $1.3 billion [17] - 100% of new portfolio company debt originations were first lien senior secured [17] - The equity co-investment portfolio consisted of 79 investments with a total fair value of $179 million, representing 10% of the total portfolio [19] Market Data and Key Metrics Changes - The lower middle market remains competitive, with a significant number of private equity firms represented across the investment portfolio [20] - Approximately 93% of the credit portfolio is backed by private equity firms, which provide guidance and potential junior capital support [18] Company Strategy and Development Direction - The company aims to maintain dividend sustainability, strong credit performance, and continued access to capital from multiple sources [8] - The recent approval for a second FDIC license allows for an additional $175 million in debt capital to support the lower middle market platform [6] - The company plans to methodically and opportunistically raise secured and unsecured debt capital, as well as equity capital through its ATM program [32] Management's Comments on Operating Environment and Future Outlook - The geopolitical landscape has created uncertainty, impacting the lower middle market and potentially leading to slower M&A activity [11][12] - The company has identified 7% of the debt portfolio as moderate risk due to tariff exposure, but only 1% has significant exposure with a loan-to-value above 50% [13] - Management remains optimistic about the quality of deals being underwritten, focusing on service industries less affected by macroeconomic uncertainties [36] Other Important Information - The company raised over $300 million in new debt capital commitments during the year [5] - The regular dividend increased from $2.24 per share to $2.31 per share, with an additional $0.23 per share in supplemental dividends [7][8] - The company has a robust liquidity position with approximately $384 million in cash and undrawn leverage commitments [31] Q&A Session Summary Question: How attractive is the current vintage of investments in the lower middle market? - Management believes the current deals are of high quality, particularly in service industries, while cyclical deals are being delayed or pulled from the market [36] Question: What were the main drivers of the net realized loss and markdown in the credit portfolio? - The realized and unrealized losses were primarily driven by restructurings of two portfolio companies [39] Question: When will the company start injecting capital into the new SBIC subsidiary? - Capital injection is expected to begin in the next three months, with the first draws anticipated shortly thereafter [41] Question: What is the outlook for the PIK income trend? - PIK income has increased due to a few companies electing it, but it is expected to decrease as companies return to cash payments [52] Question: What does the current pipeline look like? - The pipeline includes 3 to 5 new platform companies with expected capital commitments of $75 to $100 million, along with around $50 million in add-on activity [56]