This week’s market
This week (from December 13, 2021 to December 17, 2021), agriculture, forestry, animal husbandry and fishery fell by 1.87%, and CSI 300 fell by 1.99%. Among the fine molecule industries, fishery (0.92%) and planting (0.89%) led the increase, while aquaculture fell significantly (- 3.10%). The top three stocks rose were Fujian Wanchen Biotechnology Co.Ltd(300972) (17.12%), Wanxiang Doneed Co.Ltd(600371) (14.44%) Tianshui Zhongxing Bio-Technology Co.Ltd(002772) (10.40%); the top three fell were Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) (- 10.17%) and Fujian Aonong Biological Technology Group Incorporation Limited(603363) (- 7.97%), Muyuan Foods Co.Ltd(002714) (- 7.54%). Focus this week: the production capacity adjustment of fertile sows is basically in place, and the draft amendment to the seed law will be reviewed in the second instance
[pigs] the average price of pigs this week was 16.36 yuan / kg, down 1.8% on a weekly basis. The average wholesale price of pork was 24.01 yuan / kg, down 2.2% on a weekly basis. At present, the supply of standard pigs in the market is sufficient, offsetting the impact of lack of large fertilizer in the early stage. The demand side is close to the winter solstice consumption season, and there is still support at the slaughtering side. It is expected that the pig price will fluctuate in the short term. ① In November, the national pig feed output was 11.41 million tons, with a month on month increase of 4.6% and a year-on-year increase of 12.9%. It indicates that the production capacity is still in the release period or there is a pressure bar at the breeding end. ② In November, the number of fertile sows in China was 42.96 million, down 1.2% month on month, close to the normal number. It means that the sow capacity has been adjusted ahead of schedule, and the running center of the pig price in the fourth quarter of 2022 is expected to move upward. However, it is still necessary to pay attention to the consistency of the industry’s optimistic expectation of pig price in the second half of next year, which may lead to the operation of rolling column at the breeding end, thus inhibiting the increase of pig price. From a longer-term perspective, the promotion of the inflection point of the pig cycle is not only the only way to eliminate sows, but also the continuous downturn in the mood of making up fences at the breeding end will eventually be transmitted to the commodity end and amplify the marginal effect of capacity elimination. Considering the high time cost and capital cost, we believe that stocks with growth attributes in the cycle have the value of layout in advance. It is suggested to pay attention to breeding enterprises with “financial stability” and “performance flexibility” ( Tangrenshen Group Co.Ltd(002567) , Wens Foodstuff Group Co.Ltd(300498) ).
[seed industry] the spot prices of corn and wheat this week were 2754.6 yuan / ton and 2854.7 yuan / ton respectively, up 0.1% and 0.7% week on week. In the new season, corn has been increased one after another, but the weather in the main producing areas of Northeast China is unstable, and extreme snow may affect corn transportation. Before the Spring Festival, the arrival of American corn in Hong Kong is expected to be less than 2 million tons, and the supply impact of imported corn concentrated in Hong Kong is weakened. ① In the USDA global crop supply and demand report in December, the world corn ending inventory in 2021 / 22 is expected to be 305.54 million tons, higher than the forecast of 304.42 million tons in November. There is little change in global corn data. It is worth noting that China’s corn output has been reduced from 273 million tons to 272.55 million tons, but this is still a record output. ② The second deliberation draft of the revised seed law will be submitted to the 32nd meeting of the Standing Committee of the 13th National People’s Congress for deliberation on December 20. The second deliberation draft of the revised draft intends to further strengthen the protection of intellectual property rights in the seed industry, expand the protection scope and links of new plant variety rights, and improve the substantive derivative variety system. From the perspective of industry, China’s grain market will continue to maintain a tight balance for a long time in the future, attach great importance to food security at the policy level, and accelerate the commercialization of genetically modified organisms. 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) ) with leading scientific research strength and GM first mover advantage, which will fully benefit from the double dividends of “cycle” and “growth” in the future, and the market share is expected to be further improved.
Risk statement
The number of listed pig breeding companies is lower than expected; Shenzhen Agricultural Products Group Co.Ltd(000061) the price fluctuates greatly; Breeding outbreak exceeded expectations
