1. Report Industry Investment Rating - No information provided in the document 2. Core Viewpoints of the Report - High temperatures have led to a decline in egg production rates, alleviating supply pressure. Combined with market stocking sentiment, the spot price of eggs bottomed out earlier and rose more than expected, causing short - sellers in the near - term contracts to exit. However, with a high premium, long - sellers still lack confidence. In the short term, the near - term contracts will fluctuate mainly following the spot price, lacking a clear trend. For contracts after September, the earlier bottoming of the spot price further reduces the sentiment for culling hens. With limited cost changes and an expected continuous increase in theoretical supply, the upside space for the spot price is limited, and the high - price period is expected to be short. It is recommended to continue to look for short - selling opportunities after price rebounds [12][14]. 3. Summary by Directory 3.1 Weekly Assessment and Strategy Recommendation - **Spot Market**: Last week, domestic egg prices rose and then stabilized. High temperatures reduced egg production rates, leading to a shortage of large - sized eggs. Traders were bullish, and market purchasing enthusiasm was high, but cautious sentiment after the price increase led to price stabilization. The increase in egg prices was greater than that of costs, and profitability returned to a balanced state. For example, the price of large - sized eggs in Heishan increased by 0.3 yuan to 2.9 yuan/jin, in Guantao by 0.18 yuan to 3.18 yuan/jin, and in Huilongguan by 0.37 yuan to 3.39 yuan/jin, while in Dongguan, it decreased by 0.11 yuan to 3.15 yuan/jin. With high inventory of laying hens, the supply is sufficient, but high - quality large - sized eggs are in short supply. After consecutive price increases, terminal sentiment has become cautious. Consumption is in the traditional peak season, and it is expected that next week's demand will be weak first and then strong, with egg prices likely to rise again after a small decline [12][21]. - **Replenishment and Culling**: Due to low costs, the number of replenished chickens has been high since the second half of last year. However, since May, the monthly replenishment volume has decreased due to increased breeding losses and seasonal factors. In June, it further dropped to 81.5 million, a year - on - year increase of 1.9% and a month - on - month decrease of 9.4%. In June, low - price losses led to a large - scale culling of hens, and the average age of hens dropped to around 500 days. But since July, the bullish sentiment in the market has increased, culling has stagnated, and the age of hens has returned to the current high level of 506 days [12]. - **Inventory and Trend**: As of the end of June, the inventory of laying hens at sample points was 1.34 billion, a month - on - month increase of 60 million and a year - on - year increase of 6.8%, in line with expectations. Assuming normal culling, the inventory will continue to increase, peaking at 1.355 billion in November this year, a 1.1% increase from the current level, indicating an overall oversupply in the future [12]. - **Demand**: After the plum - rain season, inventory consumption has improved. With the approach of the Mid - Autumn Festival and National Day, egg consumption is expected to gradually emerge from the off - season in the first half of the year. After the pulsed stocking, the consumption peak in the second half of the year will gradually arrive [12]. - **Trading Strategy**: For unilateral trading, it is recommended to short - sell on price rebounds for contracts 09, 10, and 11, with a profit - to - loss ratio of 2:1, a recommended cycle of 1 - 2 months, and a core driving logic related to inventory, spot price, cost, demand, and culling. For arbitrage, no strategy is recommended at present [15]. 3.2 Spot - Futures Market - **Spot Price Trend**: The spot price of eggs rose and then stabilized last week. High temperatures affected production, and large - sized eggs were in short supply, driving up prices. After the increase, cautious sentiment led to price stabilization. Although the supply of laying hens is high, high - quality large - sized eggs are scarce. Consumption is in the peak season, and it is expected that demand will first weaken and then strengthen, with egg prices likely to rise again after a small decline [21]. - **Basis and Spread**: After the spot price strengthened, it lost its upward momentum. The current basis is still low, putting pressure on near - term contracts, and the spread between months is suitable for reverse arbitrage [24]. - **Culled Hen Price**: Previously, more old hens were culled, and the price difference between white chickens and culled hens decreased significantly. Recently, due to the expected price increase in the peak season, culling has stagnated [27]. - **Chick and Pullet Price**: No specific analysis in the text. 3.3 Supply Side - **Egg - Laying Hen Replenishment**: Due to low costs, the number of replenished chickens has been high since the second half of last year. However, since May, the monthly replenishment volume has decreased due to increased breeding losses and seasonal factors. In June, it further dropped to 81.5 million, a year - on - year increase of 1.9% and a month - on - month decrease of 9.4% [34]. - **Culled Hen Exit**: In June, low - price losses led to a large - scale culling of hens, and the average age of hens dropped to around 500 days. But since July, the bullish sentiment in the market has increased, culling has stagnated, and the age of hens has returned to the current high level of 506 days [37]. - **Inventory and Trend**: As of the end of June, the inventory of laying hens at sample points was 1.34 billion, a month - on - month increase of 60 million and a year - on - year increase of 6.8%, in line with expectations. Assuming normal culling, the inventory will continue to increase, peaking at 1.355 billion in November this year, a 1.1% increase from the current level, indicating an overall oversupply in the future [39][42]. 3.4 Demand Side - **Sales Volume in Sales Areas**: After the plum - rain season, inventory consumption has improved. With the approach of the Mid - Autumn Festival and National Day, egg consumption is expected to gradually emerge from the off - season in the first half of the year. After the pulsed stocking, the consumption peak in the second half of the year will gradually arrive [47]. 3.5 Cost and Profit - Cost has increased slightly but is still low compared to the same period last year. Profitability is at a relatively low seasonal level [52]. 3.6 Inventory Side - With the start of spot consumption, inventory pressure has eased, showing a seasonal downward trend, but it is still relatively high compared to the same period [57].