Recently, cost-side support has been strong, but live pigs at 2605 are unlikely to see a large unilateral surge; mainly observing.

Live hog futures LH2605 main contract opened higher and continued to rise, reaching a peak of 11,340 yuan/ton, up more than 2%. Spot prices have recently hit new lows, with the national average price for external three-yuan live pigs at 10.29 yuan/kg, down 0.06 yuan/kg day-on-day, and down 28.89% year-on-year. From the supply side, by the end of 2025, the breeding sow inventory will be 39.61 million, a decrease of 1.16 million from the previous year, down 2.9%, currently at 101.6% of normal holdings. Capacity reduction is slow, and due to efficiency improvements, the impact of capacity reduction is limited, with supply remaining high before October this year; Mysteel sample enterprises plan to significantly increase slaughter plans by 17.63% in March, maintaining high overall slaughter pressure, causing pig prices to continue declining and hit new lows in the stage. On the demand side, post-holiday is a traditional off-season, mainly digesting household inventories, with sluggish wholesale pork sales, overall consumption declining, providing limited support for pig prices; only slaughtering enterprises are gradually resuming operations. Conclusion: fundamentals show ample supply and weak demand, pig prices fluctuate at low levels, mainly bottoming out. The 2605 contract is likely to fluctuate within 11,100–11,600 yuan/ton, with little chance of a sharp upward trend. In the short term, supported by costs, bullish sentiment is somewhat released, but a large single-sided rise is unlikely. It is recommended to stay on the sidelines. (First Innovation Research)