Morning Insight：June 5，2026

Morning Insight:June 5, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen Wu (Contact)Certification：F03133175 wuyuchen@gtht.com Main Body Live Hogs:Tightening cash flows and emerging negative feedbackmechanisms are expected to accelerate inventory liquidation and capacityreduction in the near term. Since the fourth quarter of 2025, the live hog industry has remained in aloss-making environment. During the first quarter of 2026, several listedproducers reported losses that exceeded market expectations. Industryaverage prices in the second quarter have fallen well below first-quarterlevels, while slaughter volumes have reached record highs for thesameperiod, suggesting that a number of producers may post their largestquarterly losses on record. According to third-party industry data, producers' planned dailymarketings for June have changed little from May levels, indicating thatsupply pressure remains elevated. In addition, average hog weights acrossthe market remain relatively high, while speculative secondary fatteningoperations continue to incur losses. Weight-gain margins have remainednegative for three consecutive months, and as summer temperatures rise,producers' willingness to market animals is gradually increasing.On the demand side, June marks the beginning of the seasonal summerslowdown in pork consumption. At the same time, by-product contractorshave remained under financial pressure and have proactively loweredprices, further squeezing slaughterhouse margins.Elevated frozen porkinventories accumulated earlier in the cycle have also reduced both thecapacity and willingness of processors to build additional stocks, whilespeculative demand remains limited. Overall, the market is expected to remain oversupplied throughout June.As industry cash flows continue to tighten, some producers may enter aphase of forced liquidation and panic selling, accelerating bothinventory reduction and capacity rationalizationacross the sector.Meanwhile, nearby futures contracts are approaching delivery and areexpected to gradually converge toward spot prices through basiscompression. With the industry potentially entering a third cyclicaltrough, the fundamental backdrop increasingly favors bear-spreadstrategies as downward pressure concentrates in the nearby portion of thecurve. Nickel:Weakening speculative sentiment is likely to keep nickel pricesunder pressure and trading in a volatile range. From a fundamental perspective, rising inventories across the downstreamrefining and processing sectors continue to weigh on nickel prices. Atthe same time, the two key speculative themes that previously supportedthe market—tightness in nickel ore supply and elevated sulfur costs—haveboth failed to develop as strongly as expected. Nickel ore shipments from the Philippines have exceeded marketexpectations, while Indonesian ore prices have remained weaker thananticipated. In addition, following changes to ore pricing mechanisms,the extent to which higher raw material costs can be passed downstreamhas proven more limited than the market initially expected. Meanwhile,expectations for additional mining quotas in Indonesia and anormalization of sulfur supply through the Strait have further dampenedspeculative enthusiasm. These developments have coincided with a softermacroeconomic backdrop, reinforcing downward pressure on marketsentiment. That said, caution is still warranted when assessing downside potential.There has not yet been a meaningful correction in either sulfur prices orhigh-grade nickel ore prices, suggesting that production costs remainrelatively well supported. As a result,the scope for further price declines may be more limited than current sentiment implies. Overall, nickel prices are expected to remain under pressure and tradewithin a range in the near term. Market participants should continue toclosely monitor Indonesian government policy developments, as well asconditions affecting sulfur supply and transportation through the Strait.From a trading perspective, opportunities to establish short positions atthe upper end of the trading range may be worth considering. Open Interest Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch News Highlights: 1. China's Ministry of Industry and Information Technology (MIIT) onThursday launched a joint ministry-provincial collaborative pilot programfor 6G innovation and development. The project aims to provide strongsupport for the future commercial rollout of 6G. Key priorities include advancing frontier 6G technologies, deepeningintegration of communications with artificial intelligence, satelliteinternet, and wireless sensing, as well as stepping up research anddevelopment on 6G base stations, core network equipment, terminals,chips, and operating systems. Pilot regions will explore 6G use cases tailored to local conditions,targetin