On February 23, the futures market Shenzhen Agricultural Products Group Co.Ltd(000061) varieties led the rise. As of the closing, oil and oil led the rise. The main contract of palm oil rose nearly 5%, and the two main contracts of rapeseed meal and bean rose 2.42% and 2.06% respectively.
On February 23, the Ministry of agriculture and rural areas revealed at the press conference of the state information office that this year, it will appropriately raise the minimum purchase price of rice and wheat, stabilize the subsidy policies for corn and soybean producers and rice subsidies, and realize the full cost insurance and planting income insurance of the three major grain crops, and the full coverage of major grain producing provinces and counties.
The Central Committee’s “No. 1 document” of 2022 released the previous day proposed to stabilize the basic situation of agriculture, do a good job in the work of “agriculture, rural areas and farmers”, continue to comprehensively promote rural revitalization, and ensure stable and increased agricultural production, steady increase of farmers’ income and stable and peaceful rural areas.
The annual “No. 1 document” will boost the A-share agricultural sector, and this year is no exception. As of the closing, the A-share market Shenzhen Agricultural Products Group Co.Ltd(000061) and Rural Revitalization sector were among the top gainers, Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) (000816. SZ), Hubei Forbon Technology Co.Ltd(300387) (300387. SZ), Zjamp Group Co.Ltd(002758) (002758. SZ), Guizhou Bc&Tv Information Network Co.Ltd(600996) (600996. SZ) and other stocks rose by the limit.
Citic Securities Company Limited(600030) believes that under the background of industry recovery and seed industry revitalization, the seed industry has officially entered the “three-phase superposition” period of high business cycle, strong policy support cycle and new technology upgrading cycle. Changes in market scale and competition pattern will drive the upgrading of industry profit model.
strengthen financial services and two major insurances to help “agriculture, rural areas and farmers”
Unlike previous years, this year’s No. 1 central document mentioned that we should do our best to improve grain production and supply of important Shenzhen Agricultural Products Group Co.Ltd(000061) , increase policy guarantee and innovate institutional mechanisms.
in terms of Strengthening Rural Revitalization financial services, the document proposes to optimize and improve the “insurance + futures” model, strengthen market-oriented sharing and compensation of agricultural credit risks, and give full play to the role of agricultural credit guarantee. It is worth noting that the “insurance + futures” has been written into No. 1 central document for seven years.
According to Liu Jin, senior analyst of green Dahua futures Shenzhen Agricultural Products Group Co.Ltd(000061) , the “insurance + futures” model has accelerated since the pilot was launched in 2015. Under this mode, insurance companies, futures companies and agricultural entities have formed a close cooperative relationship. The guaranteed varieties include sugar, rubber, soybean, corn, cotton, wheat, eggs, apples, red dates and pigs, which not only ensures the planting income of farmers, but also promotes the development of financial markets such as futures.
According to Liu Jin, at present, many new varieties have begun to design the service mode of “insurance + futures” in advance in the R & D stage of listing, such as peanut futures listed on February 1, 2021. On the first day of listing, many futures companies have launched peanut “insurance + futures” projects to help revitalize villages and towns.
In terms of actively developing agricultural insurance and reinsurance, the opinions mentioned that the full cost insurance and planting income insurance of the three major grain crops should be fully covered in major grain producing provinces and counties; Explore the development of sugar cane full cost insurance and planting income insurance.
And the No. 1 central document in 2021 stressed the different expressions of “expanding the total cost insurance and income insurance coverage of rice, wheat and corn”. In 2022, No. 1 central document emphasized that the two insurance policies were extended from the “pilot” to the whole province of the main producing provinces and large grain producing counties.
In addition, the Opinions also mentioned the need to strengthen the support for small refinancing and rediscount of agricultural support for local legal person financial institutions with institutional legal persons in the county, business in the county and funds mainly used for rural revitalization, and implement a more preferential deposit reserve policy. Support various financial institutions to explore medium and long-term credit models for agricultural and rural infrastructure.
stabilize production and prices and ensure the “three major” grain
The opinion points out that the minimum purchase price of rice and wheat will be appropriately raised in 2022, and the subsidy policies for corn and soybean producers and rice subsidies will be stabilized.
The document pointed out that we should stabilize the sown area and output of grain throughout the year and ensure that the sown area of grain is stable and the output remains above 1.3 trillion Jin. The document mentioned the need to vigorously implement the soybean and oil production capacity improvement project, involving soybean, rapeseed and peanut, which is expected to further improve China’s oil crop supply capacity.
In this regard, China International Capital Corporation Limited(601995) believes that China’s seed production industry has ushered in changes and is gradually adjusting and strengthening in many aspects, including strengthening the protection and utilization of seed sources, strengthening innovative protection, promoting the development of biological breeding technology, etc. Agriculture, especially seed production industry, will benefit from this, driving the improvement of investment sentiment.
Nanhua Futures Co.Ltd(603093) according to the analysis, China’s soybean output in recent years basically showed a steady growth trend. Before 2016, due to the obvious higher income of corn planting than soybean, the area of corn increased and the area of soybean decreased. In 2021, soybean and corn have been almost the same in terms of planting income.
At present, whether it’s corn. Or the price performance of soybean is relatively strong. According to the data of Tonglian, datayes! Statistics show that since this year, the international soybean price has risen by more than 20%, exceeding the price of corn and wheat. The price of soybean futures contract on the Chicago Board of trade is approaching a ten-year high.
Nanhua Futures Co.Ltd(603093) according to the analysis, the contradiction between supply and demand of corn may be more prominent than that of soybean due to the reduction of corn planting area in the world’s main producing countries and the huge demand for corn from pig and other poultry breeding in 2021. Future market price changes will have a decisive impact on Farmers’ choice of planting varieties.
On the 22nd, the State Food and materials reserve bureau announced that according to the current market situation in China and abroad, relevant state departments decided to arrange some central reserve edible oil tankers and will start policy soybean auction to increase the supply of soybeans and edible oil market.
Yu Lanlan, researcher of CCB futures Shenzhen Agricultural Products Group Co.Ltd(000061) , analyzed that due to the seasonal decline of palm oil production, Indonesian export policy control and market concerns about the weather in South American soybean producing areas, vegetable oil prices continued to strengthen. China auctioned policy soybeans to increase soybean oil supply, and soybean oil prices are expected to peak in the short term.
In addition, the document also mentioned the requirements for the storage and transportation of agricultural materials such as pig production, cotton price and chemical fertilizer, and strictly control the processing of fuel ethanol with corn as raw material. Do a good job in the allocation and transportation of agricultural production reserves such as chemical fertilizer and promote the guarantee of supply and stable price, which are closely related to the futures market.
Specifically, in order to ensure the supply of “vegetable basket” products, stabilize the long-term support policy for pig production, stabilize the basic production capacity and prevent the ups and downs of production.
Connected data datayes! It shows that within one month after the No. 1 central document was issued from 2017 to 2021, the pork sector rose by 5.01%, -1.48%, 34.66%, 33.24% and -7.84% respectively, and the average monthly growth rate was 12.72% in 5 years.
Galaxy Securities believes that in 2021, the pig breeding industry will have excess supply, and the pork price will drop by 70%; The industry has sustained losses for five months, and the production capacity has been gradually eliminated. The long-term support policy for pig production shows that to a certain extent, the government will use administrative means to regulate pig supply in order to stabilize pig prices.
