Core view
Drought in South America reduces production expectations and soybean prices continue to rise. Affected by the drought in South America, the prices of soybeans in and out of the sector have increased significantly since the Spring Festival. CBOT soybeans closed 1601.4 cents / bushel this week, with a weekly increase of 1.0% and a year-on-year increase of 16.3%. In February, the US Department of agriculture lowered the global soybean production of 21 / 22 by 8.7 million tons, including 5 million tons, 2.2 million tons and 1.5 million tons in Brazil, Paraguay and Argentina respectively. The global soybean ending inventory of 21 / 22 was further reduced to 92.83 million tons, a decrease of 2.37 million tons compared with the estimate in January, a year-on-year decrease of 7.6%.
The rise in raw material prices pushed feed prices up simultaneously. As the main feed raw material, the price change of soybean meal, the product of soybean crushing, will significantly affect the feed sales price. Since the beginning of the year, the average price of compound feed of various varieties has increased by about 1%, including 0.8% for fattening pigs and 1.8% for broilers; The year-on-year increase was more than 30%, including 35.2% for fattening pigs and 31.2% for broilers.
Feed price increases are transmitted downward, and breeding losses are further deepened. Feed cost is the main component of breeding cost. The rise of feed price may affect the rise of breeding cost in the industry. Under the background of downward trend in the current cycle, the loss of the industry may be further amplified. According to Boya Hexun, the average loss of self breeding heads this week was 495.14 yuan, up 158.43 yuan from last week; The purchased piglets lost 149.84 yuan, with a profit of 2.44 yuan / head last week. The expansion of industry losses will accelerate the elimination of production capacity. According to the Ministry of agriculture, the number of fertile sows continued to decline month on month in January, a decrease of 0.9%, a year-on-year decrease of 3.7% in the first month, and a cumulative decrease of 2.74 million in seven months.
Investment proposal and investment object
Losses in pig breeding continued, and the logic of industrial reversal was strengthened. Raw material prices rose, industry losses continued, capacity deregulation is expected to further ferment, and the reversal of pig prices is basically determined. It is suggested to pay attention to the allocation opportunities of pig breeding sector.
Risk tips
Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, epidemic risk, policy risk, industry competition and product risk
