Report Industry Investment Rating - Not specified in the provided content Core Viewpoints of the Report - In the first half of 2026, it's only a matter of time before the egg supply and demand return to re - balance as the production capacity is significantly reduced. The main pressure on the current egg - laying hens comes from the record - high replenishment volume between August 2024 and March 2025, and it's expected that the peak of this round of replenishment cycle will be completely cleared around June 2026. The new production pressure before May 2026 may be limited, and the high feed price after the Spring Festival in 2026 has led to a decrease in farmers' reluctance to cull chickens at high ages [3]. - From March to April 2026, the overall market liquidity is still very abundant, and the overall pressure on agricultural products is relieved. However, the near - term egg price is restricted by supply - demand pressure and is not sensitive to the macro - environment. It's difficult for the egg price to rise significantly before the Tomb - Sweeping Festival. From May to June, both supply and demand are expected to improve significantly. The current egg futures price has fallen, and the premium of each contract to the spot has significantly converged. The 2604 and 2605 contracts may have room for rebound if farmers cull chickens more quickly and consumption recovers. The 07, 08, and 09 contracts are suspected of being over - valued, and the replenishment situation of farmers in March - April needs further observation [4]. - In trading, it's advisable to buy the 2605, 2606, and 2607 contracts near the breeding cost, and keep the 2608 and 2609 contracts on hold for the time being [5]. Summary by Relevant Catalogs 1. Market Performance of Agricultural Products and Eggs - In 2025, the agricultural product market fluctuated greatly. In January, the weakening of the US dollar led to a weak rebound of the domestic agricultural product index. In February, the external agricultural products continued to be strong. In March, the market showed a wide - range shock. In April, the Sino - US tariff escalation led to a collective decline in risk asset prices, and agricultural products were relatively resistant to decline but showed obvious differentiation. From August to September, the decline of the agricultural product sector expanded, and the breeding reached a new low. In October, the agricultural product index fell to the annual low. From January to March 2026, commodities as a whole rose sharply, and agricultural products also increased [6]. - In 2025, the large - scale decline in replenishment volume from October to December led to a premature rise of the far - month egg futures price to a high premium. From January to March 2026, the egg spot price did not rise beyond expectations, the far - month egg futures price oscillated and fell back to repair the excessive premium, but the continuous rise in feed price led to a rise in the egg price bottom [8]. - After the Spring Festival in 2026, the absolute price of eggs was not high, and the seasonal decline was lower than that of previous years. The price of small - sized eggs strengthened in the fourth quarter of 2025, and the current price difference has returned to the normal range [13][17]. 2. Supply and Demand of Eggs - There are great differences in the decline range of egg - laying hen存栏. The institutional data shows that the存栏 pressure was still large in February. The near - term supply pressure is still relatively large according to the monthly supply - demand data [31][32]. - The number of old chickens to be culled is gradually increasing (from October 2024 to April 2025 replenishment). The chick price has shown a seasonal rebound after a long - term low - level consolidation. The hatching profit has gradually returned to near the break - even point after being negative for a long time, and the hatching rate of breeding eggs is at a relatively low level in the same period in recent years [35][41][46]. 3. Chicken Culling and Breeding Profit - In 2025, the culling age of chickens rebounded after a low - level shock, and there was still a sentiment of delaying culling in the market. The overall culling volume of chickens in 2025 was slightly 1.1% lower than that in 2020, and the culling volume in the first quarter of 2026 decreased seasonally compared with the previous period [50][52]. - In March 2026, the loss amplitude of egg - laying hen breeding was close to that in the same period of 2021. After the sharp rise in corn price in March, the loss amplitude of egg - laying hens expanded again. This round of egg - laying hen loss time is relatively long, but the overall poultry breeding profit has rebounded from a low level [56][57][64]. 4. Egg Futures Situation - In March 2026, the futures position of eggs decreased from the historical high on a month - on - month basis. The ratio of the egg index to the corn index has gradually fallen to the historical low, and the price difference between the far and near months of the egg forward curve has converged [68][71][73]. - The 03 contract has fulfilled the post - Spring Festival spot low, and the basis between futures and spot has returned. The key to the 04/05/06 contracts lies in chicken culling, and the full cost of the industry is in the range of 3400 - 3500. The 07/08/09 contracts depend on the replenishment situation in the first quarter, and the current contract prices have a premium to the spot and breeding cost [75][78][81]. - The basis of near - month contracts is moderately strong, and the premium of far - month contracts is at a historical high level. The 5 - 9 spread in the first half of the year is prone to seasonal weakening. The egg 05 contract is prone to rise in April, and the current volatility of the egg futures price is generally high. Attention should be paid to whether the 2605 contract can form effective support near the breeding cost of 3300 - 3400 [87][90][93].

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The global economic growth is slowing down, and the Fed has entered an interest - rate cut cycle, which may indirectly affect egg prices through inflation expectations. However, China's egg prices are mainly determined by domestic supply - demand relations [8]. - In 2025, the domestic egg market has a core contradiction of oversupply and weak demand. But the supply pressure is expected to ease in the future, and the egg price is expected to stabilize and rebound next year [15]. - The industrial subsidy policies may reduce the breeding cost in the long - term but may also lead to over - capacity expansion, while the environmental protection and epidemic prevention policies are beneficial to the long - term development of the industry [18]. - The egg market in 2025 is characterized by significant supply - demand imbalance. In December, the supply - demand pattern is shifting from loose to tight - balance, and the egg price has fundamental support, but the upside space is restricted [24]. 3. Summary According to Relevant Catalogs International Situation - The global economic growth slows down. The IMF predicts that the global GDP will grow by 3.2% in 2025 and may further slow down to 3.1% in 2026 [8]. - The Fed has cut interest rates, which may lead to inflation expectations and increase the cost of egg breeding, but the impact on China's egg prices is indirect [8]. - The global egg market scale in 2025 is $121.42 billion with a growth rate of 8.9%. Due to the impact of avian influenza, the egg prices in different countries have diverged, and China's exports may increase [11]. Domestic Situation - China's economic situation is generally stable, but domestic demand is insufficient. The GDP in the first three quarters of 2025 is 101.5 trillion yuan, with a year - on - year growth of 5.2%, and the annual growth is expected to be about 5.0% [15]. - The continuous low egg price reflects the imbalance between supply and demand of agricultural products in China. Although the impact on CPI is limited, it is regarded as an inflation "wind - vane" [15]. - The domestic egg market has a core contradiction of oversupply and weak demand. The inventory of laying hens is at a high level, and the demand is affected by substitutes. The egg price is low, and the breeding profit is at a five - year low. However, the supply pressure is expected to ease [15]. Macro Policy - There are industrial support policies such as subsidies for farmers using self - bred improved varieties, and financial support policies like loan interest subsidies and policy - based insurance [18]. - Overall, industrial subsidy policies may lead to over - capacity, while environmental protection and epidemic prevention policies are beneficial to the long - term development of the industry [18]. Supply - Demand Fundamentals and Annual Viewpoint Strategy - In November 2025, the national inventory of laying hens was about 1.307 billion, showing a slight decline. In December, the number of newly - opened laying hens will continue to decrease, and the inventory is expected to decline but remain at a high level [22][49]. - As of December 12, the average price in the main production areas was 3.09 yuan per catty. In the short term, the egg price is under pressure, while in the medium term, the supply - demand expectation has improved [22][36]. - The egg market in 2025 is characterized by supply - demand imbalance. The supply - demand pattern is changing, and the egg price has support but limited upside. The strategy is that the main contract fluctuates widely at a low level, and long positions in far - month contracts and call options can be considered in the medium term [24]. Technical Analysis - In the short term, the JD2603 contract shows a downward - oscillating trend, with the 5 - day moving average in a short - selling arrangement. The K - line may indicate a short - term rebound, but the 20 - day moving average is a strong resistance [103]. - In the medium - term on the weekly level, there is a "double - top" prototype, and if the neck - line support at about 3012 points is broken, the price may fall further [103]. - The support level is 2937 - 3000, and the resistance level is 3150 - 3195 [104].

Core Viewpoint - The recent decline in domestic egg prices has seen some regions drop below 3 yuan per jin, while egg futures prices have rebounded, raising questions about the sustainability of this rebound [1] Group 1: Market Dynamics - The primary reason for the rebound in egg futures prices is the improvement in expectations and stabilization of spot prices, following a prolonged decline in egg prices throughout the year [1] - As of November 26, the average price of shell eggs in major markets was 2.91 yuan per jin, up from 2.80 yuan per jin on November 20, indicating a slight recovery in spot prices [2] - Egg inventory has shifted from an increase to a decrease, with production enterprise inventory days dropping from 1.11 days on November 20 to 1.01 days by November 26 [2] Group 2: Supply and Demand - The current supply of eggs remains relatively excessive, with overall demand stable but in a seasonal lull between two demand peaks [3] - The number of laying hens decreased slightly in October, with a recorded decline of 0.66% month-on-month, suggesting a potential shift in supply dynamics [3] - The average price of culling hens has also decreased, with the price dropping below 4 yuan per jin, indicating an acceleration in the culling process [2] Group 3: Future Outlook - The current rebound in egg prices may be viewed as a bottoming out or an attempt to initiate a cyclical uptrend, but it is constrained by the relationship between spot and futures prices [4] - Short-term pressures on egg prices exist due to high inventory levels and the ongoing high number of laying hens, which may limit upward price movement [4] - The market is closely monitoring the pace of culling, as historical data suggests that significant reductions in culling age are necessary to determine if a substantial decrease in supply will occur [3]