1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The egg production capacity shows a downward trend, but the pace of reduction has slowed and the extent is less than expected. The short - term absolute supply remains high, and there is a post - poned expectation. The spot price is supported by short - term demand, but lacks the impetus for continuous price increases. The futures market has incorporated some optimistic expectations, but the high premium is likely to be squeezed out near the delivery date. It is recommended to sell on rebounds for the near - term contracts, and pay attention to the support from cost changes for the far - term contracts [11][12] 3. Summary by Directory 3.1 Monthly Assessment and Strategy Recommendation - **Spot Market**: Since February, domestic egg prices have declined significantly. The supply - demand relationship has become looser, market demand has weakened, and the overall circulation has slowed down. With a slight increase in supply, the egg price center has shifted downwards. The breeding profit has turned negative again, the number of culled chickens has decreased, the chicken age has increased, and the enthusiasm for replenishment has risen. The prices of large - sized eggs in major producing areas and major consuming areas have all decreased. In the short term, as egg prices reach a low level, the purchasing enthusiasm of traders may increase, and egg prices have a small room for increase, but the abundant supply limits the increase. It is expected that egg prices will slightly rise in a volatile manner this month [11] - **Replenishment and Culling**: In February, the number of replenished chickens was 86.6 million, a year - on - year decrease of 5.1% and a month - on - month increase of 0.2%. The replenishment level is not as good as the same period last year, but it has continued to improve month - on - month. The significant month - on - month increase in chicken chick prices also confirms this. Regarding culling, due to the previous low egg prices and continuous breeding losses, the number of culled chickens increased continuously, leading to a decline in chicken age. During the pre - Spring Festival stocking season, the sales were fast, the egg price increase exceeded expectations, and the breeding end returned to profitability. After the Spring Festival, the opening price was higher than expected, which led to a slowdown in the culling of chickens. Currently, the chicken age has stopped falling and rebounded to 502 days, an increase of 18 days from the lowest point [11] - **Inventory and Trend**: As of the end of February, the inventory of laying hens was 1.35 billion, a month - on - month increase of 0.6% and a year - on - year increase of 3.4%. The absolute level is still high, higher than the previous value and expectations, mainly because the market's sentiment of delaying culling has increased, and the culling of chickens has fallen short of expectations, resulting in an accumulation of supply. Based on the previous replenishment, considering normal culling, it is expected that the inventory will gradually peak and decline in the future, dropping to 1.304 billion by July this year, a decline of 3.4%. Although the relative supply will gradually decrease, the absolute supply is still high [11] - **Demand Side**: As egg prices reach a phased low, downstream traders may start to replenish their stocks one after another, and the sales speed of eggs is expected to accelerate. After the traders' replenishment is completed, the demand for eggs may stabilize [11] - **Trading Strategy**: For the unilateral strategy, it is recommended to sell on rebounds for the 05 - 07 contracts with a profit - loss ratio of 2:1 and a recommended cycle of 3 - 4 months. The core driving logic includes inventory, consumption, chicken age, and replenishment. For the arbitrage strategy, it is recommended to conduct reverse arbitrage after the spot price realizes the expected increase [13] 3.2 Spot and Futures Market - **Spot Price Trend**: Since February, domestic egg prices have declined significantly. The supply - demand relationship has become looser, and the price center has shifted downwards. The prices of large - sized eggs in major producing areas and major consuming areas have decreased. In the short term, as egg prices reach a low level, there is a small room for price increase, but the abundant supply limits the increase [20] - **Basis and Spread**: After the Spring Festival, the spot price dropped significantly, and the basis fell to a relatively low level again. The monthly spread was mainly in short - term shock [23] - **Culled Chicken Price**: As egg prices rebounded from a low level, breeding turned profitable, and farmers were reluctant to sell, leading to an increase in the price of culled chickens and chicken age [26] - **Chicken Chick and Egg Chick Price**: The month - on - month increase in chicken chick prices also confirms the improvement in the enthusiasm for replenishment [33] 3.3 Supply Side - **Egg Chicken Replenishment**: In February, the number of replenished chickens was 86.6 million, a year - on - year decrease of 5.1% and a month - on - month increase of 0.2%. The replenishment level has continued to improve month - on - month [33] - **Culled Chicken Out - put**: Due to the previous low egg prices and continuous breeding losses, the number of culled chickens increased continuously, leading to a decline in chicken age. After the Spring Festival, the culling of chickens slowed down, and the chicken age has stopped falling and rebounded to 502 days [36] - **Inventory and Trend**: As of the end of February, the inventory of laying hens was 1.35 billion, a month - on - month increase of 0.6% and a year - on - year increase of 3.4%. It is expected that the inventory will gradually peak and decline in the future, dropping to 1.304 billion by July this year, a decline of 3.4% [38][41] 3.4 Demand Side - As egg prices reach a phased low, downstream traders may start to replenish their stocks, and the sales speed of eggs is expected to accelerate. After the replenishment is completed, the demand for eggs may stabilize [46] 3.5 Cost and Profit - The cost is lower year - on - year and has rebounded month - on - month. The breeding profit is neutral, with small losses in the off - season [51] 3.6 Inventory Side - After the Spring Festival, the inventory has increased significantly, but it is neutral compared with the same period seasonally [56]

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - The market has entered the inventory accumulation period around the Spring Festival. With weak demand and high inventory, the spot price is likely to fall rather than rise, driving the futures market downward. Considering the rapid accumulation of pre - festival inventory and the significant decline in spot prices, the near - month contracts may still need to squeeze out the premium. Maintain a short - selling strategy. The far - end market will re - trade the logic of production capacity reduction after the spot price turns, but the implementation path under low cost and high premium remains uncertain, and attention should be paid to the pressure after the price rises [11][12] Summary by Relevant Catalogs 1. Monthly Assessment and Strategy Recommendation - **Spot Market**: From January to now, domestic egg prices first soared and then fell due to sentiment. At the beginning of the month, industry players were bullish, with fast market sales and low upstream and downstream inventories. By the end of the month, the price increase accelerated and exceeded expectations. However, from the end of the month to now, due to risk - control sentiment, demand decreased, inventory increased significantly, and egg prices dropped sharply from the high. In January, the slaughter of laying hens slowed down, the average age of hens increased, and the prices of chicks and young chickens rose. In February, market demand will gradually weaken, and egg prices will generally decline. After the Spring Festival, egg prices may fall below the cost [11] - **Restocking and Culling**: In January, 86.44 million hens were restocked, a year - on - year decrease of 3.6% and a month - on - month increase of 9.2%. The restocking sentiment is not as strong as last year, but it has improved month - on - month due to the increase in spot prices and the optimistic market outlook. The prices of chicks have also risen from the low. Due to the previous low egg prices and continuous breeding losses, the slaughter of hens increased, and the average age of hens decreased. During the pre - Spring Festival stocking period, the sales of eggs were fast, and the egg price increase exceeded expectations. The breeding sector returned to profitability, which led to a slowdown in hen slaughter, and the average age of hens has now stopped falling and increased to 495 days [11] - **Inventory and Trend**: As of the end of January, the inventory of laying hens was 1.342 billion, lower than the previous value but higher than expected. The main reason is that the decrease in previous restocking led to a decline in newly - laid hens, but the slowdown in hen slaughter since January slowed down the decline in inventory, and the absolute value is still high. Based on the previous restocking data and normal hen slaughter, it is expected that the inventory will gradually peak and decline in the future, dropping to 1.289 billion by June this year, a decline of 3.9%. Although the relative supply will gradually decrease, the absolute supply is still relatively high [11] - **Demand Side**: As egg prices have risen to a phased high, traders are more cautious, and the market purchase volume may decrease. As the Spring Festival approaches, migrant workers are returning home, and the export of eggs is gradually turning into domestic sales. In the short term, attention should be paid to the digestion of domestic sales in the production areas [11] - **Trading Strategy**: Hold short positions in far - month contracts at high prices, short - sell near - month contracts such as 03 on rebounds, and pay attention to the possible logic switch after the Spring Festival. The profit - loss ratio is 2:1, and the recommended period is 1.5 months. The core driving logic includes inventory, spot price, and seasonality [13] 2. Spot and Futures Market - **Spot Price Trend**: From January to now, domestic egg prices first rose and then fell. In February, market demand will gradually weaken, and egg prices will generally decline. After the Spring Festival, egg prices may fall below the cost. For example, the price of large - sized eggs in Heishan increased by 0.3 yuan to 3.1 yuan per catty in January, with a monthly high of 3.8 yuan per catty [20] - **Basis and Spread**: The spot price has dropped significantly, and the basis has returned to normal. As the spot price turns downward, the monthly spread is more suitable for reverse arbitrage [23] - **Slaughtered Hen Price**: As egg prices rebounded from the low and breeding became profitable, farmers were reluctant to sell, and the price of slaughtered hens and the average age of hens increased [26] - **Chick and Young Chicken Price**: Due to the increase in restocking sentiment, the prices of chicks and young chickens have risen from the low [11] 3. Supply Side - **Egg - Laying Hen Restocking**: In January, 86.44 million hens were restocked, a year - on - year decrease of 3.6% and a month - on - month increase of 9.2%. The restocking sentiment has improved month - on - month due to the increase in spot prices and the optimistic market outlook [33] - **Slaughtered Hen Sales**: The previous low egg prices and breeding losses led to continuous large - scale slaughter of hens and a decline in the average age of hens. During the pre - Spring Festival stocking period, the egg price increase exceeded expectations, and the breeding sector returned to profitability, which led to a slowdown in hen slaughter, and the average age of hens has now stopped falling and increased to 495 days [36] - **Inventory and Trend**: As of the end of January, the inventory of laying hens was 1.342 billion, lower than the previous value but higher than expected. It is expected that the inventory will gradually decline to 1.289 billion by June this year, a decline of 3.9%, but the absolute supply is still relatively high [38][41] 4. Demand Side - As egg prices have risen to a phased high, traders are more cautious, and the market purchase volume may decrease. As the Spring Festival approaches, migrant workers are returning home, and the export of eggs is gradually turning into domestic sales. In the short term, attention should be paid to the digestion of domestic sales in the production areas [46] 5. Cost and Profit - The cost is lower year - on - year and has increased month - on - month. After the increase in spot prices, the breeding profitability has significantly recovered to the normal seasonal level [51] 6. Inventory Side - The pre - festival inventory has increased significantly, indicating that the supply scale is still large [56]