Group 1: Investment Rating - No investment rating for the industry is provided in the report. Group 2: Core Viewpoints - The egg market has entered a seasonal peak season, with futures and spot prices rising in tandem. Although the number of laying hens in production remains high, new replenishment has slowed down, and the elimination of backward production capacity has accelerated from June to July. Coupled with the recent high - temperature weather, the overall energy efficiency has decreased, and the effective market supply has slowed down. With the arrival of the tourist season and the departure of the rainy season, market stocking enthusiasm has increased, leading to a phased futures - spot linkage rebound. It is recommended to buy on dips and pay attention to reverse spread opportunities [3]. Group 3: Summary by Directory Futures - Last week, egg futures rebounded. Previously, the continuous rise in spot prices did not drive the futures up, mainly due to the premium of the futures over the spot, the concentrated delivery pressure in July, and the high inventory supply. However, the high - temperature weather broke through these constraints, initiating a seasonal peak - season rebound [6]. Spot - Last week, egg spot prices rose across the board. Due to the high - temperature weather, the egg - laying rate decreased, the upstream inventory was low, and the market had a strong price - supporting mentality. The downstream, affected by the previous spot price correction, had low inventory and little stocking. The downstream's concentrated procurement led to a tight supply - demand situation and continuous price increases. The spot prices in other production areas in the country have returned to the mid - June high of about 3 yuan per catty. The subsequent rise in spot prices still depends on the support from the demand side [13]. Supply - **New Capacity**: The new production capacity from June to August 2025 corresponds to the replenishment volume from February to April 2025, which is basically at a high level and higher than the historical average. - **Eliminated Capacity**: The normal eliminated capacity from June to August 2025 corresponds to the replenishment volume from October 2023 to January 2024, and the available elimination volume is relatively neutral. - **Laying Hens in Production**: The inventory of laying hens in production remains high. The new capacity is increasing steadily, and the new replenishment has slowed down. The available elimination volume this month is decreasing steadily. Data shows that the backward production capacity has started the active elimination stage, but at a relatively slow pace. Overall, the supply pressure still exists [16]. Elimination - The price of culled chickens is 4.9 yuan per catty, an increase of 0.29 yuan per catty. As the egg price rises, it rebounds and enters a seasonal strengthening trend. The elimination volume has been rising and is gradually reaching its peak and then falling. As the egg price is about to rise, the elimination will slow down. The average elimination age is 502 days, remaining the same, and the overall age has entered the normal range [21]. Seasonal and Substitute Products - Seasonally, with the arrival of the tourist season and the increasing demand for deep - processing, there may be a turnaround in mid - July. The inventory pressure in production areas is not large, but the high - temperature weather has reduced the egg - laying rate and increased costs. On the consumption side, after the rainy season, the overall demand has improved. - In terms of substitute products, the high - temperature weather has reduced the vegetable supply and increased vegetable prices, which support the egg price to some extent. The pork price is oscillating at a high level, and its substitution effect on eggs is not obvious. Other meat prices have strengthened in stages [23][25]. Cost and Profit - **Cost**: Corn prices are running at a high level, and the spot price of soybean meal is falling steadily. The overall cost remains volatile. Currently, the feed cost is about 2.5 yuan per catty, and the comprehensive breeding cost is about 2.8 yuan per catty. - **Profit**: Recently, egg prices have risen, and the spot price has returned above the feed cost. However, the overall comprehensive breeding profit is still in the red, but it has bottomed out seasonally. The negative feedback on production capacity caused by the profit loss is gradually taking effect, and attention should be paid to the elimination of backward production capacity [28][29]. Capital and Market Sentiment - Capital is at a high level, and market competition has intensified. Short - sellers believe that due to the high production capacity and seasonal suppression, there is still room for the price to fall. Long - sellers believe that the valuation is low, and the season is about to turn from weak to strong, making it valuable to go long [32]. Basis and Spread - **Basis**: The basis is negative, and the overall futures are at a premium. The market expectation is positive. Currently, the basis is running at a low level, waiting for the strengthening trend of the basis brought by the active peak season. - **Spread**: In the future, as the production capacity in the cycle decreases, reverse spreads in the cycle are the main strategy [34][37].

Report Title - "High Temperature Hits, Market Enters Seasonal Peak Season - Egg Weekly Report 2025-07-14" [1] Report Investment Rating - Not provided Core Viewpoints - The current contradiction is the co - existence of high supply and seasonal weather factors, leading to low spot prices. However, there will be a conversion point between the cycle and seasonal strength and weakness. The futures and spot markets are expected to have a phased rebound, and it is recommended to buy on dips and pay attention to reverse arbitrage opportunities [3] Summary by Directory Futures Market - Last week, the egg futures showed a neutral trend, with near - term contracts being weaker and far - term contracts being stronger. The near - term contracts were supported by delivery, maintaining a premium, while the far - term contracts oscillated. The spot was still constrained by weather and short - term supply - demand pressure, and the futures were in a phased bottom - building process, waiting for a reversal [6] Spot Market - Last week, the egg spot was generally stable. The production areas drove the sales areas to lower prices. The inventory in the production areas was high, and the market was actively selling goods and lowering prices. The sales areas were generally stable. Currently, weather conditions were suppressing spot prices, but the seasonal peak season was approaching, with tourism and demand support on the way, and the energy efficiency on the supply side would further decrease [14] Supply - **Newly - added capacity**: From June to August 2025, the newly - opened production corresponded to the replenishment volume from February to April 2025, which remained at a high level, higher than the historical average [17] - **Eliminated capacity**: From June to August 2025, the normal eliminated capacity corresponded to the replenishment volume from October 2023 to January 2024, and the available elimination volume was relatively neutral [17] - **Laying hen inventory**: The inventory of laying hens remained at a high level. The newly - added capacity increased steadily, the new replenishment slowed down, and the available elimination volume decreased slightly this month. The data showed that the backward production capacity had started the active elimination phase, but relatively slowly, and the overall supply pressure still existed [17] - **Eliminated chickens**: The backward production capacity began to be removed but had not entered the acceleration phase. The price of eliminated chickens was 4.51 yuan/jin, down 0.1 yuan/jin, seemingly entering a bottom - rebound period. The elimination volume continued to rise and was approaching the peak, and the "shutdown" might slow down. The average elimination age was 502 days, down 2 days, showing an obvious downward trend [21] Demand - The demand side did not change significantly. With students across the country on vacation, the demand slowed down in the short term. New demand release needed time, waiting for support from summer tourism and mid - to - long - term Mid - Autumn Festival stocking [3] Cost and Profit - **Cost**: The corn price remained at a high level, and the soybean meal spot price declined steadily. The overall cost fluctuated slightly downward. Currently, the feed cost was about 2.5 yuan/jin, and the comprehensive breeding cost was about 2.8 yuan/jin [3] - **Profit**: The breeding profit fell below the feed cost, and the entire industry entered a deep loss period, operating at a low level, waiting for a seasonal bottom - rebound. The negative feedback of production capacity caused by profit losses was gradually taking effect, and attention should be paid to the elimination of backward production capacity [3][30] Market Sentiment and Spread - **Funds**: The funds were at a high level, and the market competition intensified. The bears believed that due to high production capacity and seasonal suppression, there was still room for decline, while the bulls thought the valuation was low and the season was about to turn from weak to strong, presenting value for long - positions [33] - **Basis**: The basis was negative, and the overall futures price was at a premium, with positive expectations. Currently, the basis was at a low level, waiting for the strengthening trend brought by the active peak season [35] - **Spread**: The decline in spot prices suppressed near - term contracts, and short - term reverse arbitrage was the main strategy [38] Related Product Impact - **Vegetables**: Vegetable prices were about to enter a seasonal strengthening phase, providing some support for egg prices [26] - **Pork**: The pork price continued to weaken, and its substitution effect on eggs was not obvious [26] - **Other meats**: The prices of other meats showed a short - term strengthening trend [26]