This week (2.7 ~ 2.11) focused on: pig market oversupply, short-term price shock and downward trend
[pigs] the average price of pigs this week was 12.18 yuan / kg, down 5.87% on a weekly basis. The average wholesale price of pork was 23.20 yuan / kg, up 3.29% on a weekly basis. In terms of feed, the price of compound feed for fattening pigs this week was 3.64 yuan / kg, up 0.28% on a weekly basis. After substantial stock up before the Spring Festival, the operating rate of slaughtering enterprises is at the lowest point in the year. The late Spring Festival is about to enter the traditional consumption off-season, and the overall demand situation is weak. On the whole, the supply and demand of the pig market is unbalanced, and the pig price may continue to weaken. We should focus on the duration rather than the depth of the decline. If the decline continues for more than a quarter, the secondary de industrialization of production capacity will be opened again. At the bottom of the cycle, it is suggested to actively arrange enterprises with both financial stability and growth, focusing on Wens Foodstuff Group Co.Ltd(300498) (continuous improvement of operation, company + breeding community + farmer mode to ensure stable growth of production capacity) and Tangrenshen Group Co.Ltd(002567) (whole industry chain operation, excellent performance in various financial indicators), Secondly, focus on COFCO Jiakang (backed by COFCO group, it has the cost advantage of raw feed grain and the rapid expansion of production capacity).
[seed industry] this week, the spot price of corn was 2724 yuan / ton, down 0.06% on a weekly basis; The spot price of wheat was 2876.8 yuan / ton, up 0.11% week on week. After the festival, the corn market trade continues to be cold, and the breeding industry continues to decline. It is expected that China’s corn price will continue to be at the current level in the short term, with a slight shock. During the holiday, affected by the weather, many overseas institutions reduced the expected output of Brazilian soybeans, which promoted the rise of American soybean prices, thus forming a certain pulling effect on the price of domestic soybeans. Under the current low global soybean inventory, soybean prices will maintain a strong operating trend. From the perspective of industry, China’s grain market will continue to maintain a tight balance for a long time in the future, and the commercialization of genetically modified organisms will speed up. It is suggested to pay attention to high-quality seed enterprises ( Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Winall Hi-Tech Seed Co.Ltd(300087) ) and transgenic technology companies ( Beijing Dabeinong Technology Group Co.Ltd(002385) ) with leading scientific research strength and GM first mover advantage. In the future, they will fully benefit from the double dividends of “cycle” and “growth”, and the market share is expected to be further improved.
[animal health insurance] in January 2022, the year-on-year growth rate of the number of batches of vaccines issued for pigs was from high to low: porcine parvovirus vaccine + 50.0%, porcine circadian vaccine + 12.66%, foot-and-mouth vaccine + 2.86%, classical swine fever vaccine – 26.95% and Porcine Pseudorabies Vaccine – 46.21%. This week, the animal husbandry and Veterinary Bureau of the Ministry of agriculture and rural areas drafted the announcement on matters related to the use of highly pathogenic animal pathogenic microorganisms in the development, production and inspection of veterinary biological products (Exposure Draft), which further tightened the use of highly pathogenic animal pathogenic microorganisms in the process of R & D and production, or will accelerate the clearance of small and medium-sized backward production capacity. In addition, the price of veterinary drug raw materials will gradually hit the bottom after the festival, and the production cost of veterinary drug enterprises will be further reduced. At present, the valuation level of the dynamic insurance industry is at a historical low. It is suggested to pay attention to the leading companies with strong R & D strength and comprehensive product coverage ( Pulike Biological Engineering Inc(603566) , Jinyu Bio-Technology Co.Ltd(600201) ).
Risk warning: the slaughter volume of pigs is lower than expected; Shenzhen Agricultural Products Group Co.Ltd(000061) the price fluctuates greatly; The outbreak exceeded expectations.
