**📅 Date:** ➤ ⌈ [[2025-02-26-Wed〚Pig Trade▪QE ▪OMO 〛]]⌋ **🗺️ Site**： **👤 Who**：[[⟴X♆⊡Π␢Π⟴⊡]] **📌 Time**: #🕛/ **💭 Note:** ➤ Fun knowledge during the chat of yesterday’s lesson ➤ Pre-slaughter stress in Pigs will cause "weight loss" in pigs in a larger scale, (Fasting Before Slaughter,Transportation Stress,Holding Period) ⇩ 🅻🅸🅽🅺🆂 ⇩ **🏷️ Tags**: **🗂 Menu**: ⌈[[✢ M O C ➣ 02 ⌈F E B - 2 0 2 5⌉ ✢|2025-F E B-MOC]]⌋ ➤ ⌈[[💰 L017-Equity Investments]]⌋ ➤ ⌈⌋ ➤ ⌈⌋ **📑 PDF**：[[L017-EI-01 Financial System Structure, Investment Assets.pdf]] **🌐 Link**: [Effect of lairage time prior to slaughter on stress in pigs: a path analysis](https://porcinehealthmanagement.biomedcentral.com/articles/10.1186/s40813-023-00350-w?utm_source=chatgpt.com) ---   ## 📌 Why Pigs? Pigs are one of the most actively traded agricultural commodities due to their **fast growth cycle, high demand in global meat markets, and sensitivity to feed costs**. The pig market is influenced by **supply-demand cycles, economic trends, and even behavioural psychology** in trading. --- ## 🛒 How Agricultural Commodity Trading Works ### 🌾 Agricultural Futures & Spot Markets - ==Futures Contracts(期货）==: - Farmers and traders **hedge against price fluctuations** by locking in prices for future delivery. - ==Spot Markets（现货）==: - Buyers and sellers trade pigs, corn, and soybeans **at current market prices**. ### 📈 What Moves the Market? #### 1️⃣ 🐖 Weight Cycles & Seasonality - Pigs grow **fast**, and their **weight at market time** significantly affects pricing. - **Lean hogs** are traded based on expected weights & demand forecasts. - **Supply fluctuations (disease outbreaks, weather)** impact price volatility. #### 2️⃣ 🌽 Feed Costs & Corn Prices - Pigs eat a **lot** of corn & soybeans. If **feed prices rise**, **pig production costs increase**, and farmers may **reduce herd sizes**, lowering future supply. - Corn price spikes **lead to fewer pigs**, raising pork prices. #### 3️⃣ 🇨🇳 China’s Demand - China is **the world’s largest pork consumer**. - **ASF (African Swine Fever)** outbreaks impact production, causing **price spikes globally**. ### 4️⃣ 🐷 The "Pig Cycle" Effect - Farmers **expand production** when prices rise. - **By the time new pigs are ready**, oversupply **crashes prices** → **Boom-Bust Cycle**. - Traders use **futures contracts** to **hedge against volatility**. --- ## 📊 Pig Trading Economics: The Smart Money Moves ### 💰 **How Traders Think** 🐖 **"Buy low, sell high"** is **not enough**—you need to **anticipate herd behavior** and **supply shocks**. 🔁 **Cyclicality**: When pork prices **spike**, farmers **raise more pigs** → leads to **oversupply**, lowering prices. 🛑 **Hedging with Futures**: Large producers **lock in prices in advance** to protect against **market swings**. --- ## 🧠 Behavioral Economics of Pig Trading ### 💡 Traders Are Humans, Not Machines - **Fear & Greed** drive price swings: Farmers **expand too fast when prices are high**, causing future **price crashes**. - **The "anchoring effect"**: When prices are **unusually high**, people assume they’ll stay high, leading to **overinvestment**. #### 🐽 Key Behavioral Insights: ✔ **Overconfidence Bias**: Farmers think **"this time is different"**, expanding **too aggressively**. ✔ **Herd Mentality**: If one farmer **expands**, others follow → Boom-Bust Cycle repeats. ✔ **Recency Bias**: Traders **overreact** to short-term news, mispricing long-term trends. --- ## 🔥 **Fun Facts About Pig Trading** - **China has a Strategic Pork Reserve** 🐷🇨🇳 (Yes, like oil reserves but for pork!) - **The Lean Hog Futures market** is one of the **most volatile** in commodities trading. - **A single ASF outbreak** can move the **global pork market overnight**. - **McDonald’s Bacon Promotions** have been known to **spike hog prices** temporarily. --- ### The Weight changing pattern - **Pre-slaughter stress** (transport, fasting) causes **3-5% weight loss**. - **Friday weight drop**: Pigs slaughtered on **Saturday** may lose weight from stress. - **Futures contracts** help farmers **hedge against price fluctuations**. - **Spot markets** trade pigs **at current market prices, affected by weight trends**. - **Meat quality risk**: Stress leads to pale, soft, exudative meat)**, reducing value.