Morning Insight: August 11, 2026

Morning Insight:August 11, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen WuCertification：Z0024232wuyuchen@gtht.com Main Body Live Hogs:Recent Stabilization, with Focus Shifting Toward the CycleReversal The recent widening of the premium between heavy and standard hogs inSouthwest China has triggered renewed price support, encouragingproducers to hold back sales and helping spot prices stabilize aftertheir recent decline. However, overall supply pressure is expected toremain relatively high in August, suggesting that the scope for furtherprice gains will be limited and near-term trading will becomeincreasingly driven by market positioning. The current hog cycle has been characterized by nearly a year of losses,with the magnitude of losses substantial enough to trigger genuinecapacity liquidation. According to official data on the breeding herd,capacity liquidation accelerated in the second quarter, with the breedingsow population falling to 37.8 million head. Sow culling remainedelevated in July, increasing the probability that the industry's capacityreduction target for the third quarter will be achieved ahead ofschedule. From the perspective of piglet profitability, selling piglets remainedprofitable in March 2026, while July was expected to be the peak seasonfor piglet restocking, implying a relatively high theoretical breedingrate. Therefore, the number of newborn piglets in July will become animportant new benchmark for assessing future supply. Meanwhile, bothfinishing operations and piglet production were deeply loss-making fromApril to June, which should have had a significant negative impact on breeding rates and survival rates. This implies that piglet supply datafrom August onward could show an accelerated decline. If official July piglet data confirm an accelerated decline, this wouldprovide further evidence for the capacity liquidation thesis and supportexpectations of an accelerated reduction in supply following the deeplosses incurred during the second quarter. In this case, much of thebearish expectation for deferred contracts would have already been pricedin. With the March contract already trading below expected productioncosts, the current discount to cost provides an attractive setup fordirectional long positions targeting the broader cycle reversal. Open Interest Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch News Highlights: 1. The People's Bank of China (PBOC), China's central bank, has issued areform and development plan for the 2026-2030 period, making workarrangements aimed at accelerating the building of a nation with a strongfinancial sector and improving the centralbanking system. The plan said measures will be taken to "prudently advance high-levelfinancial opening-up," noting efforts will be made to expand the globaluse of the renminbi in international trade, investment and financing,deepen two-way financial market access, quicken steps to build Shanghaiinto an international financial center and enhance the role of Hong Kongas a global financial center. As part of the opening-up drive, the PBOC will enhance the multi-tieredand broad-coverage Cross-Border Interbank Payment System (CIPS) and pushforward the development of offshore renminbi markets. On the domestic monetary policy front, the plan sets out to build a morescientific and robust framework by refining the modern monetary policysystem with Chinese characteristics, improving the base-money issuancemechanism, and making better use of bothaggregate and structural tools.It stresses the need to enhance market-based interest rate formation,transmission, and adjustment mechanisms, while allowing the market toplay a decisive role in exchange-rate determination and keeping the renminbi broadly stable at a reasonable and equilibrium level. To fortify financial stability, the central bank will expand the coverageof macro-prudential management, enrich its policy toolkit, and establisha monitoring and evaluation system to mitigate systemic risks in keyareas. A major pillar of the plan is to strengthen the real economy's access toquality financial services. The PBOC has pledged to build a precise andeffective policy system to support major strategies, key sectors, andaddress weak links. This includes developing a financial system tailoredto scientific and technological innovation. It also aims to enhance greenand low-carbon financing, expand inclusive finance, improve the pensionfinance system and accelerate digital finance. Looking ahead to the 2026-2030 period, the PBOC says it will ensure allmeasures in the plan are executed effectively to boost China's strengthin finance and support high-quality economic development. (Source:Xinhua) 2. The Hang Seng Index gained 137.15 points, or 0.53 percent, to open at25,805.18 points on Monday. (Source: Xinhua) 3. Chinese robot maker Un