Core Viewpoint - The current egg prices in China are experiencing a significant decline, with a 2.3% drop from the previous week and a 23.7% decrease compared to the same period last year, indicating a challenging market environment for the poultry industry [1]. Group 1: Price Trends and Influencing Factors - As of August 4, the wholesale market price for eggs was 7.54 yuan per kilogram, reflecting a notable year-on-year decline [1]. - Traditional seasonal factors such as the rainy season, high temperatures affecting egg production, and pre-Mid-Autumn Festival stocking are typically expected to drive up prices, but this year, the demand is insufficient due to weak capacity reduction [1][4]. - The current age of culling hens has decreased from 538 days to 506 days, but the actual culling volume remains below historical levels, leading to slow capacity clearance and limiting upward price movement [1][4]. Group 2: Inventory and Production Insights - As of the end of July, the national inventory of laying hens was approximately 1.356 billion, showing a month-on-month increase of 1.2% and a year-on-year increase from 1.277 billion [1]. - Future trends indicate that the positive breeding profits starting from May 2024 may lead to increased restocking activity in the second half of 2024, with a slight increase in inventory expected in Q3 of this year [2]. - Despite seasonal demand recovery anticipated in the second half of the year, the high inventory level of around 1.35 billion hens suggests that the industry must undergo significant capacity reduction to achieve market balance [4]. Group 3: Market Outlook - The egg price is expected to remain under pressure in the near term due to high inventory levels, with potential for further declines [4][5]. - The report suggests that the egg price may follow a pattern of being weak in the short term but stronger in the long term, depending on supply-side adjustments [4].

1. Report Industry Investment Rating - No relevant information provided 2. Core View of the Report - In the first half of 2025, the egg market was in a trough with high supply and weak demand. Although there were signs of capacity reduction in June, the re - balance of supply and demand still needed time. In the short term, egg prices faced great pressure, but with the arrival of the traditional consumption peak season in the third quarter, demand would recover and prices might bottom - out and rebound, though the increase would be limited and the price peak might not exceed last year's level [6][7][49] 3. Summary by Relevant Catalogs 3.1. First Half of 2025 Egg Market Review 3.1.1. Futures Prices - In the first half of 2025, the main egg futures contract showed a volatile downward trend, dropping below 3000 yuan in March. There were rebounds in March - April and May - June, but they were limited. As of June 30, the main JD2508 contract closed at 3566 yuan/500 kilograms, with a 0.68% increase [14] 3.1.2. Spot Prices - The egg spot market in China continued to weaken in the first half of 2025, with prices below the cost line. The average price in the main production areas dropped from 3.23 yuan/jin at the beginning of the year to 2.64 yuan/jin in mid - June, a cumulative decline of 18.3%. As of June 30, it was 2.67 yuan/jin, a 40% decrease from the beginning of the year. The price movement could be divided into three stages: a sharp decline after the Spring Festival, a weak rebound, and an accelerated decline [18] 3.2. Fundamental Analysis 3.2.1. Laying Hen Inventory - The laying hen inventory remained high in June 2025, at about 1.27 billion. The supply was abundant, and the supply - demand contradiction was intensified by the high mold rate in the rainy season and the low prices of substitutes [21] 3.2.2. Old Hen Price Analysis - In the first half of 2025, the average price of old hens was 5.11 yuan/jin, a 1.73% decrease compared to the same period in 2024. As of June 30, it was 4.64 yuan/jin, a 19.58% decrease from the beginning of the year. The price fluctuated in stages, affected by factors such as egg prices, holidays, and supply - demand imbalances [26][27] 3.2.3. Chick Sales and Price Analysis - In the first half of 2025, chick sales showed a "decrease - increase - decrease" trend, with a monthly average of 423.4 million, a 0.12% increase compared to the same period in 2024. Chick prices first rose and then fell, reaching a high of 4.57 yuan/chick in February and a low of 3.90 yuan/chick in June. The decline was due to factors such as low egg prices, high feed costs, and low replenishment enthusiasm [32][34] 3.2.4. Elimination Progress Analysis - From January to June 2025, the monthly average old hen slaughter volume was 1.9618 million, a 13.95% decrease compared to the same period in 2024. The slaughter volume first decreased and then increased in the first quarter and continued to rise in the second quarter. The average slaughter age was 527 days, a 1.71% increase year - on - year [40] 3.2.5. Laying Hen Breeding Cost and Profit - Egg - laying hen breeding has been in a loss state this year. As of now, the breeding cost is 3.53 yuan/jin, and the loss is 0.73 yuan/jin [44] 3.3. Futures - Spot Basis and Inter - Month Spread - No detailed analysis content provided, only data tables such as futures - spot basis and inter - month spread are presented [44] 3.4. Market Outlook - In the short term, egg prices face great pressure. With the arrival of the peak season in the third quarter, demand will recover and prices may rebound, but the increase will be limited [49] 3.5. Operation Strategy - In the short term, it is recommended to wait and see due to market uncertainties. In the medium - to - long term, pay attention to the marginal changes in capacity reduction and demand recovery in July. If they resonate, a trend rebound may occur [50]