Core Viewpoint - The article discusses the cyclical nature of the egg-laying industry, highlighting the current downtrend in profits and the implications for market expectations and investment strategies [2][4]. Group 1: Industry Cycles - The egg-laying industry has experienced seven cycles over the past 15 years, with each cycle lasting approximately 2-2.5 years. The current profit cycle, lasting from April 2021 to January 2025, is notably long at 45 months, indicating potential deviations from historical patterns [2][3]. - The current egg futures price has fallen below 3000 yuan per 500 kg, with total contract holdings exceeding 1 million, reflecting a significant downturn in market sentiment [2]. Group 2: Supply-Side Dynamics - In the early stages of loss, producers adjust their purchasing of chicks and the timing of culling older hens, which can be tracked through chick sales and culling age data [3]. - The industry consensus during initial oversupply pressures is to reduce costs and optimize efficiency rather than immediately cut production. This includes improving feed management, biosecurity, and adopting advanced production technologies [4][5]. Group 3: Investment and Production Capacity - Since 2022, the egg-laying industry has seen a surge in capital investment, with the current stock of laying hens reaching 1.356 billion, up from an average of 1.204 billion during the previous profit cycle [5]. - The strategy of maximizing production to dilute investment depreciation is prevalent, leading to lower price elasticity of supply in response to profit fluctuations [4][5]. Group 4: Profitability and Cost Management - The average profit per kilogram of eggs reached 0.82 yuan in 2022, with total profits for the year estimated at 48.318 billion yuan based on a production volume of 29.38 million tons [6]. - The cash cost of egg production for leading enterprises is projected to be between 2.6 and 2.75 yuan per kilogram, with current market prices still allowing for profitability [9]. Group 5: Short-Term Indicators - Monitoring the culling of hens is more indicative of immediate production changes than chick replenishment, with current culling ages decreasing but still above levels seen in previous downturns [10]. - The construction of cold storage facilities has increased, allowing for the storage of eggs during low demand periods, which has implications for seasonal price fluctuations [11]. Group 6: Timing for Market Entry - Conditions for bottom-fishing in the egg market include prices nearing cash costs, significant cash flow depletion in the industry, and sustained high culling rates [12][13]. - External shocks, such as avian influenza, could significantly impact market dynamics, but currently, no such indicators are present [14].

Core Viewpoint - The domestic agricultural futures market on May 16 showed mixed performance among various agricultural products, with notable price movements in live pigs, apples, red dates, and eggs [1] Price Movements - The main live pig futures fell by 1.12%, closing at 13,700.00 CNY/ton [1] - Apple futures increased by 0.96%, closing at 7,811.00 CNY/ton [1] - Red date futures decreased by 0.38%, closing at 9,125.00 CNY/ton [1] - Egg futures also fell by 0.38%, closing at 2,891.00 CNY/500 kg [1] Opening and Closing Prices - Egg opening price was 2,886.00 CNY, previous close was 2,885.00 CNY, and last settlement was 2,902.00 CNY [1] - Live pig opening price was 13,780.00 CNY, previous close was 13,780.00 CNY, and last settlement was 13,855.00 CNY [1] - Red date opening price was 9,115.00 CNY, previous close was 9,145.00 CNY, and last settlement was 9,160.00 CNY [1] - Apple opening price was 7,726.00 CNY, previous close was 7,730.00 CNY, and last settlement was 7,737.00 CNY [1] Basis Data - As of May 15, there was a "backwardation" phenomenon in the contracts for apples, red dates, eggs, and live pigs, indicating that spot prices were higher than futures prices [1] - For apples, the spot price was 9,100 CNY, futures price was 7,730 CNY, with a basis of 1,370 CNY and a basis rate of 15.05% [1] - For red dates, the spot price was 9,200 CNY, futures price was 9,145 CNY, with a basis of 55 CNY and a basis rate of 0.60% [1] - For eggs, the spot price was 3,375 CNY, futures price was 3,013 CNY, with a basis of 362 CNY and a basis rate of 10.73% [1] - For live pigs, the spot price was 14,680 CNY, futures price was 13,855 CNY, with a basis of 825 CNY and a basis rate of 5.62% [1]