CBOT corn continues to rise, China's corn price fluctuates at a high level, and farmers have high planting enthusiasm.
In the global market, CBOT corn rose at a high level, boosted by favorable factors such as Brazil's production reduction, tense relations between Russia and Ukraine and the rising international crude oil futures price. On January 31, the high price of CBOT corn futures in March rose to 642.50 cents / bushel, a new high since 2014; CBOT corn main company contract hit a seven-month high. As of February 7, due to concerns about the impact of weather in South America on crop production, soybean prices continued to rise, providing support for corn prices. CBOT corn futures closed up 3-3 / 4 cents in March and settled at 620.5 cents / bushel, slightly lower than the previous week. From the perspective of the Chinese market, most enterprises stop collecting during the Spring Festival, the purchase and sales of corn market are light, and the price is mainly stable. It is expected that after the purchase and sales resume in the middle of the year, with the support of high international grain prices, China's corn prices will remain high and volatile.
The policy continues to be favorable, the protection of variety rights is strengthened, and the market share of the leading seed industry is expected to increase.
Following the introduction of the genetically modified quality certification method, the policy support for the sector will continue. On January 13, the Ministry of agriculture and rural areas issued the national planting development plan for the 14th five year plan, which proposed that "by 2025, the modernization of the national planting industry will make significant progress, and the guarantee capacity of important Shenzhen Agricultural Products Group Co.Ltd(000061) supplies such as grain will be significantly improved". Substantial progress has been made in the protection of intellectual property rights in the seed industry. In 2021 alone, comprehensive agricultural administrative law enforcement agencies at all levels throughout the country inspected seed bases 13000 times and seed enterprises 16000 times, investigated and dealt with 6581 cases of illegal seeds and transferred 58 cases to judicial organs, making a good start for the revitalization of the seed industry. The No. 1 central document and the seed industry revitalization action plan are also expected to be further expanded.
Investment advice
Considering the high grain price + the bottoming of corn seed inventory, the commercialization of genetically modified crops or the promotion of ceiling reconstruction + concentration of the industry, as well as the recent high international grain price and China's policy catalysis, we believe that the seed industry sector has entered a high business cycle with both volume and price, and the follow-up policies will continue to catalyze the fermentation of the market of the sector. We suggest active allocation, with emphasis on Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) Beijing Dabeinong Technology Group Co.Ltd(002385) 、 Winall Hi-Tech Seed Co.Ltd(300087) 。
Risk tips
Competition risk of feed substitutes, lower than expected commercialization of genetically modified products, and inventory backlog risk
