Huatai Securities said its research shows China’s national average hog price was
8.6 yuan/kg on Nov. 9, below the previous cycle low. The broker attributes the
deeper-than-expected second trough to persistently high industry supply and
inventories and weak consumption, leaving the Q4 seasonal uplift muted. With hog
and piglet prices hitting fresh lows, cash-flow losses are set to deepen and
could drive larger-than-expected reductions in productive sow capacity, which
would increase upside elasticity and persistence for forward prices. Huatai
noted sector positioning remains near cyclical lows and reiterated its
investment opportunity call on the hog sector.
