Le contrat à terme sur le porc vivant chute de près de 4 %, atteignant un nouveau plus bas historique, la défaite simultanée du marché à terme et au comptant, quand le hiver du cycle du porc prendra-t-il fin ?

Finance China April 7 (Editor Li Xiang) Today, the domestic live pig market futures and spot prices moved downward simultaneously, with the main contract of live pig futures dropping nearly 4% in early trading, reaching a low of 9,125 yuan/ton, a new low since the contract was listed. On the spot side, the nationwide average price of external three-variant live pigs also fell to around 9.0 yuan/kg in the early trading, down more than 76% from the 2019 historical high, hitting a low in nearly 14 years.

Industry insiders pointed out that from the perspective of operating costs, according to data released by the Price Monitoring Center of the National Development and Reform Commission, the pig-to-grain ratio in the first week of April has fallen to 3.57:1, a decrease of 1.38% month-on-month, remaining in the first-level warning zone for excessive decline set by the “Pig Meat Reserve Adjustment Plan” for eight consecutive weeks. Since September 2025, the industry has been in deep losses for over 7 months, with high-cost, high-leverage breeding entities facing increasing survival pressure.

Futures and spot prices both hit bottom, short-term weakness may be hard to reverse

Today, live pig futures all weakened, with the main contract dropping to a minimum of 9,125 yuan/ton in early trading, setting a new historical low since listing. By midday, although the decline had narrowed, it remained in a deep loss phase during the cycle’s downward trend.

Figure: Daily chart of main live pig futures contract

Data source: Wenhua Finance, compiled by Finance China

From the spot price perspective, as of the morning of April 7, the nationwide average spot price of external three-variant live pigs also fell to around 9.0 yuan/kg, a decline of nearly 14% from early March, with a year-on-year decrease of about 30%. Over 25 provinces across the country saw live pig slaughter prices fall below 5 yuan/jin, entering the “4 yuan/jin” era; additionally, the pig-to-grain ratio dropped to 3.88:1, remaining in the first-level warning zone for excessive decline set by the “Improving Government Pork Reserve Adjustment Mechanism and Ensuring Pork Market Supply and Price Stability” plan for eight consecutive weeks, far below the industry breakeven point of 6:1.

Figure: Domestic provincial live pig spot prices ( yuan/kg )

Data source: My Steel Network, compiled by Finance China

Finance China notes that supply and demand imbalance is the core contradiction behind the ongoing price decline. From the supply side, the sentiment of holding back pigs for sale remains, with the average slaughter weight still high at over 126 kg nationwide. As temperatures rise, the demand for fat pigs is insufficient, and breeding entities lack confidence in holding back, leading to increased passive capacity reduction. Meanwhile, on the demand side, after the Spring Festival, the traditional consumption off-season begins, with limited stocking during Qingming Festival, coupled with diversion by poultry meat substitutes, resulting in continued weak sales of fresh pork and a lack of effective support for fresh pork demand.

At the same time, since April, although feed costs have slightly decreased, they are insufficient to offset the decline in pig prices, and industry losses continue to expand.

Data from Zhuochuang Information shows that on April 2, the profit from domestic self-breeding and raising was -332 yuan per head, an increase of 16 yuan per head compared to last week; the profit for piglet fattening was -236 yuan per head, an increase of 21 yuan per head from last week.

Regarding the future, futures institutions generally hold a cautious view. Everbright Futures stated that although the slaughter volume from the breeding side decreased at the beginning of the month, combined with the increased enthusiasm for secondary fattening in some low-price zones, pig prices temporarily rebounded. However, in the latter part of last week, as slaughter volume recovered and weight reduction continued, pig prices stopped rising and declined, with the weekly average price still decreasing compared to the previous week.

Green Dahua Futures indicated that in the short term, the pattern of supply being strong and demand weak persists, with weight pressure not easing. Under policy guidance, the expectation of weight reduction in breeding is strengthening, and pig prices may continue to stay low in the near term, with attention to the mood of secondary breeding and frozen product storage. In the medium term, the number of new piglets in Q4 2025 has decreased for three consecutive months month-on-month, which may ease supply pressure from June to August this year, with a focus on disease impact. Long-term, the sow inventory is expected to have limited reduction before October this year, and the high point of distant contracts may shift downward.

Pig enterprises’ stock debt exceeds 30 billion yuan, mainly in convertible bonds

The continuous decline in pig prices also poses challenges for pig enterprises with debt. Finance China notes that current bond issuance by pig enterprises mainly involves convertible bonds. According to Wind data, four pig enterprises currently have outstanding bonds, with a total scale of 32.092 billion yuan.

Data source: Wind, compiled by Finance China

Some securities firms told Finance China that the core pricing logic of pig convertible bonds lies in the strong cyclical nature, with the performance and stock price of the underlying stock highly correlated with the spot pig price. The beta of the underlying stock is much greater than alpha, so the key driver of convertible bond prices is pig price expectations.

“However, with pig prices remaining low, the conversion value of bonds continues to shrink. For example, Muyuan’s convertible bond conversion price is 43.74 yuan, with a current conversion premium of 31.47%. The implied volatility of the underlying stock has been declining as cycle expectations cool, and the time value of options is accelerating decay. Investors should be alert to the increasing probability of redemption triggers leading to a downward adjustment of the conversion price,” the person said.

Industry insiders also pointed out that in the current downward cycle, investors in convertible bonds should focus on high liquidity, low premium targets, and speculate on rebound driven by oversold pig prices and policy implementation, while controlling stop-loss margins with bond bottom protection, but not over-allocate positions.