Huatai Futures: Market sentiment has improved somewhat, and pig prices are generally stable.

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Source: Huatai Futures

Author: Xue Junyuan

Live Pig Outlook

Market News and Key Data

In futures, yesterday’s close for live pig contract 2605 was 11,305 yuan/ton, down 20.00 yuan/ton from the previous trading day, a decrease of 0.18%. In spot markets, the price of external three-yuan live pigs in Henan is 11.59 yuan/kg, down 0.05 yuan/kg from the previous day, with a spot basis LH05+285, up 210 from the previous day; in Jiangsu, the price is 11.84 yuan/kg, down 0.19 yuan/kg, with a basis LH05+535, up 220; in Sichuan, the price is 12.25 yuan/kg, unchanged, with a basis LH05+945, up 250.

According to the Ministry of Agriculture and Rural Affairs monitoring, on March 18, the “Agricultural Product Wholesale Price Index 200” was 122.26, down 0.17 points from yesterday. The wholesale price index for “vegetable basket” products was 123.88, down 0.20 points. The national average wholesale price of pork is 16.18 yuan/kg, down 0.1%; beef is 66.15 yuan/kg, unchanged; mutton is 64.68 yuan/kg, up 0.2%; eggs are 7.55 yuan/kg, up 0.4%; whole chickens are 17.29 yuan/kg, up 0.5%.

Market Analysis

Live pig prices mainly fluctuate within a narrow range, with the industry average steadily holding above the key 10.0 yuan/jin level. The price of piglets continues to decline month-on-month, and industry restocking sentiment remains weak. Recently, after the bottoming out of pig prices, breeding entities’ willingness to hold prices and sell less has gradually increased. The willingness for secondary fattening and cold storage has also risen, but overall, due to the long expected bottoming period for pig prices, short-term profit margins may be limited, and all parties remain cautious. Currently, pig supply remains relatively ample, downstream slaughterhouses are less active in procurement, and the supply-demand pattern is unlikely to change fundamentally in the short term. Future focus should be on monitoring key variables such as breeding slaughtering pace, secondary fattening, and cold storage inventory changes.

Strategy

Bearish

Risks

Reserves, secondary fattening, cold storage willingness

Investment Advisory Qualification: Securities Permit [2011] No. 1289

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