Shouchuang Futures: Live pig 2605 contract price continues to decline, waiting for a rebound at low levels to short on rallies.

Today, the live pig LH2605 contract continued yesterday’s downward trend, falling to a low of 10,630 yuan/ton, a drop of nearly 2%. In terms of supply, by the end of 2025, the breeding sow inventory is expected to be 39.61 million head, a year-on-year decrease of 1.16 million head, down 2.9% year-on-year, and currently at 101.6% of the normal holding level. The capacity reduction is slow, and the efficiency improvements in production are hindering the reduction; thus, supply will remain high until October this year. The March slaughter plan for sample enterprises in Mysteel has significantly increased by 17.63%, and overall slaughter pressure remains substantial. On the demand side, March is traditionally a slack season, with weak terminal sales of white strips and passive inventory accumulation of frozen products, resulting in overall weak support for pork prices. Conclusion: The fundamentals show a loose supply and weak demand, with cash prices continuing to probe lower and continuously refreshing new lows in the past five years. The further downside potential for the 2605 contract is limited, and it is recommended to remain on the sidelines, waiting for a rebound from low levels to seize short opportunities at higher prices. (CICC Futures)