21st Century Business Herald Reporter Dong Peng
On April 7, the main pig futures contract 2605 fell to a minimum of 9,125 yuan/ton during trading, continuing to set a new low since its listing.
In the live pig spot and stock markets, there has been a halt in the decline since April, for example, the latest price of domestic live pigs (external three yuan) is 10.12 yuan/kg, which is flat compared to the spot price at the end of March. Related stocks such as MUYUAN and WENS have also not continued to decline, with some stocks even achieving slight increases during the same period.
The significant differences in the short-term trends of the futures, spot, and stock markets may be related to the intensified competition between long and short funds in the futures market.
In fact, since the pig price began its current decline in mid-March, live pig futures have been continuously breaking their position records, with the overall position increasing from around 350,000 contracts to the current approximately 500,000 contracts.
According to Wind data, as of the close on April 7, the position amount of live pig futures had reached 83.36 billion yuan, and the scale of deposited funds (margin) had reached 13.34 billion yuan.
Although pig prices have fallen to an absolute low not seen in nearly twenty years, the long and short positions in the futures market have yet to determine a winner, with the top 20 futures companies continuing to &#34;reinforce&#34; their positions in recent trading days.
Amidst the tug-of-war between long and short funds, the 2605 contract has maintained an inertial decline, continuously setting new lows.
Since April, the decline in live pig spot prices has been smaller than that of live pig futures.
Data from China Pig Farming Network shows that since April, the lowest price of domestic live pigs (external three yuan) was 10.03 yuan/kg, while the low point at the end of March was 10.06 yuan/kg. During the same period, the lowest price of live pigs (internal three yuan) was 9.95 yuan/kg, with the low point at the end of March being 10.03 yuan/kg.
In contrast, the futures market not only has a larger decline but also lower prices, especially for the 2605 contract, which is currently the &#34;main battlefield&#34; for the competition between long and short positions and has the highest trading activity.
This contract, after breaking below 10 yuan/kg at the end of March, fell to a minimum of around 9.13 yuan/kg during the morning session on April 7, setting a historical low since the listing of this variety in 2021.
The pig prices at an absolute low not seen in nearly twenty years have also attracted a large amount of capital to &#34;bottom fish,&#34; pushing the position scale of live pig futures to continue rising.
Data from Wenhua Financial shows that in early March, the total position of live pig futures fluctuated around 350,000 contracts. Subsequently, as the main contract successively broke through the integer price levels of 11 yuan/kg and 10 yuan/kg, the position volume and amount gradually increased. As of the afternoon of April 7, the total position of live pig futures had reached 501,000 contracts, an increase of over 40% compared to early March. This record position corresponds to a margin scale of over 10 billion yuan.
Additionally, according to Wind statistics, as of the close on April 7, the position amount of live pig futures had reached 83.36 billion yuan, and the scale of deposited funds had reached 13.34 billion yuan. The margin ratio corresponding to this data is 16%. The position amount can be estimated based on the futures settlement price and trading unit (16 tons/contract), with a high degree of accuracy for the relevant data. However, the deposited funds may vary due to different margin standards set by various futures companies, so the specific data mentioned above can only serve as a reference
However, even according to a lower standard, based on a 13% margin ratio for live pig futures from a leading futures company on April 7, the current positions of both long and short sides have already reached &#34;hundreds of billions.&#34;
More importantly, although live pig futures have been continuously declining in the short term, with the main contract dropping to 9.1 yuan/kg, long funds have not given up.
Taking the top 20 futures companies by position as an example, in the past few trading days, the increase in long positions has even been greater than that of short positions. For instance, on April 1, the top 20 futures companies saw long positions increase by 4,734 contracts, while short positions increased by 2,030 contracts on the same day. Similarly, on March 2 and March 3, the increase in long positions was slightly more than that of short positions, until April 7 when the increase in short positions finally surpassed that of long positions.
As the saying goes, &#34;as long as the bulls do not die, the bears will not stop.&#34; Before the long positions have fully stopped out and the holdings have significantly declined, it is difficult to say that the current trend of live pig futures can be reversed. The foreseeable change is merely that the main battleground of the long and short sides will gradually shift to the next main contract 2607 as the delivery month of contract 2605 approaches.
As of the close on April 7, the latest price for the live pig futures contract 2607 was 10.23 yuan/kg, significantly higher than the price of contract 2605 at 9.21 yuan/kg. This price difference of up to 1 yuan/kg also provides greater room for subsequent short positions to exert their influence.
Live pig breeding enterprises are natural bears; however, due to the current absolute price of live pig futures being too low, it is difficult to effectively hedge their losses in pig farming through selling for hedging. For example, the settlement price of the 2611 contract, which represents the expected pig price in November this year, was only 11.98 yuan/kg on April 7, which is below the cost line of most live pig breeding enterprises.
Based on recent performance briefings and institutional research, among the few leading breeding enterprises with cost advantages, MUYUAN and WENS had live pig costs of around 12 yuan/kg in January and February this year, while New Hope's total cost for fat pigs in February was about 12.3 yuan/kg.
MUYUAN's cost target for this year is only 11.5 yuan/kg, making it unlikely to avoid losses in the short to medium term through significant cost reductions.
Even if they choose to reduce losses by selling for hedging through long-term contracts, they must also consider the issues of insufficient liquidity and smaller market capacity for the latter as a non-main contract.
With futures prices being too low and limited ability to reduce costs, some live pig breeding enterprises have already prepared for a &#34;protracted battle&#34; and are seeking new ways to hedge against losses in their breeding business.
MUYUAN has chosen to expand into overseas markets and extend into the downstream slaughtering and meat sectors. In March 2025, the company established a wholly-owned subsidiary in Vietnam through its subsidiary, primarily engaged in providing technical services for live pig breeding and intelligent breeding equipment.
At a recent annual report exchange meeting, MUYUAN's latest statement has been adjusted to say, &#34;By 2026, the company's goal for overseas business development is to establish breeding capacity in Vietnam and to streamline the technical path for development locally.&#34;
At the same time, the company also pointed out that compared to 2025, its capital expenditure plan at the slaughtering end has been enhanced, increasing investment in the meat slaughtering business to improve the self-slaughtering ratio.
With a certain poultry business hedge, theoretically facing less operational pressure, WENS has clearly identified &#34;going overseas&#34; as an important strategic direction this year, with an initial goal of capturing about 10% of the Vietnamese yellow-feathered chicken market, and subsequently expanding into other businesses such as pig farming and duck farming based on overseas development conditions.
Historical data shows that in 2025, WENS is expected to sell 40.4769 million live pigs, including 5.0302 million piglets, making it the second largest pig farming enterprise in China, second only to MUYUAN.
In the context of promoting capacity reduction in the domestic pig industry, WENS announced that it will supply the market with 5 million fresh milk pigs and roasted milk pigs and other series of products annually, as an important way for the company to sell piglets. In its view, this move can reduce the slaughter weight of live pigs and avoid weight gain from holding them back, thereby alleviating the problem of overcapacity.
In the last pig cycle, Jingji Zhino, which is involved in real estate and farming, used external mergers and acquisitions for multi-business &#34;hedging.&#34; According to a recent announcement, the company plans to gain control of Jiangsu Huibo Robot Technology Co., Ltd. through capital increase and signing of a concerted action agreement, and include it in the consolidated financial statements. In response, Jingji Zhino stated, &#34;This will help the company balance the cyclical fluctuations of its main pig farming business and promote the company's external development.&#34;

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On April 7th, the main pork futures contract 2605 hit a new low, falling to 9,125 yuan/ton. Although the spot price of live pigs remained stable, related stocks such as MUYUAN and WENS saw some recovery. However, the competition between long and short positions in the futures market intensified, with open interest increasing from 350,000 lots to 500,000 lots, and the total position value reaching 83.36 billion yuan. Despite pig prices being at a nearly twenty-year low, the futures market has yet to determine a winner, and the 2605 contract continues to decline

腾讯新闻 - 财经

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China Southern CSI All Share Agriculture, Animal Husbandry and Fishery Products ETF

Hwabao WP CSI All Share Agriculture, Animal Husbandry and Fishery Products ETF

"Bulls don't die, bears don't stop," over 10 billion yuan in funds battle in live pig futures