Core Viewpoint - The chicken egg supply is on the rise, leading to a decrease in egg prices, with expectations that the supply pressure may ease in the future, but prices are still projected to be lower than in previous years due to a high supply base [1][3][4]. Group 1: Supply and Price Dynamics - The average monthly price of eggs has a moderate negative correlation with the number of laying hens, indicating that as the supply increases, prices tend to decrease [1]. - As of August 22, the average monthly prices for July and August were 2.89 yuan per jin and 3.04 yuan per jin, reflecting year-on-year declines of 33.41% and 36% respectively [1]. - The supply of eggs is expected to decrease after August, as the number of older hens suitable for culling is projected to decline, which may reduce the pressure on egg prices [4]. Group 2: Profitability and Cost Trends - The prolonged period of losses in egg production is expected to lead to a turning point in capacity, with slight alleviation of supply pressure anticipated [3]. - The average feed cost per jin of eggs as of August 22 was 3.04 yuan, with a month-on-month increase of 0.33% and a year-on-year increase of 1.33%, while the profit per jin of eggs was -0.20 yuan, indicating a worsening profitability situation [3]. - Despite the seasonal demand increase in the third quarter, the losses in egg production are expected to continue, leading to a cautious approach in expanding production capacity [3]. Group 3: Market Adjustments and Future Outlook - The industry is experiencing a gradual increase in the number of laying hens, but the pace of capacity reduction is expected to be slow due to the growth of large-scale enterprises [4]. - The price gap between small and large eggs may begin to correct positively starting in October, potentially supporting the prices of large eggs [4]. - Overall, even with a projected decline in the number of laying hens, the total supply remains high, making it difficult for egg prices to receive substantial support in the latter half of the third quarter [4].