Core view
Global pattern: the global division of food is obvious, and China's food security is controllable. Globally, the United States, Brazil and other agricultural powers are rich in agricultural resources and are major Shenzhen Agricultural Products Group Co.Ltd(000061) exporters; However, Mexico and other small Asian, African and Latin American countries have no food security, mainly due to the high cost of Shenzhen Agricultural Products Group Co.Ltd(000061) and poor farmers' income. Referring to the experience of Japan, the increase of Shenzhen Agricultural Products Group Co.Ltd(000061) output mainly depends on government subsidies. From the perspective of China, China's grain basically maintains its own production and demand, and only soybeans and other categories are highly dependent on foreign countries; Especially from the perspective of staple food, China's food is absolutely safe.
Global food price: Shenzhen Agricultural Products Group Co.Ltd(000061) is at an all-time high, and the boom is expected to continue. This round of global food price rise is mainly caused by
Tight supply and excessive money. Major agricultural production areas such as the United States and Brazil have been impacted by the dry weather, and the consumption ratio of major Shenzhen Agricultural Products Group Co.Ltd(000061) stocks such as corn and soybeans has continued to decline. In addition, the recovery of feed demand and the excess currency caused by the epidemic also contributed to the rise of global food prices. In addition, the conflict between Russia and Ukraine increased the expectation of tight circulation of Shenzhen Agricultural Products Group Co.Ltd(000061) such as wheat and corn, and the mood continued to drive Shenzhen Agricultural Products Group Co.Ltd(000061) prices higher. Looking forward to the future, La Nina may be repeated. The covid-19 and geopolitical situation are not clear, the tension between supply and demand is difficult to ease, and the global food price boom is expected to continue.
China's food price: rations are absolutely safe. Wheat may drive corn prices higher in 2022. 1) Forage food: the fundamentals of corn have eased slightly, but the supply and demand are still tight; Soybeans are dependent on imports. Considering the trend of global food prices, they remain optimistic in the follow-up. 2) Ration: the average inventory consumption ratio of corn, wheat and rice is close to more than 80%, and the safety margin is sufficient. The fundamentals are optimistic about wheat. In the winter of 2021, there are problems of late sowing and low germination rate in the main wheat producing areas, and the yield may be reduced in 2022. Due to the substitution relationship between wheat and corn, corn prices are expected to strengthen. 3) White sugar: China's output has declined, and the gap between supply and demand continues. Driven by the additional import cost of distribution, the sugar price will follow the reversal of the energy storage cycle of the international sugar price and remain optimistic in the follow-up.
Revitalizing agriculture: transgenic technology is expected to build an agricultural power. Despite China's lack of resource endowment, thanks to the state's subsidies and policy support for agricultural production, China's agriculture can still maintain self-sufficiency. From the transgenic safety traits publicized by the Ministry of agriculture, the follow-up promotion rhythm of transgenic in China is expected to accelerate the landing. Referring to the continuous growth of soybean yield in the United States after the implementation of genetically modified seeds, China's agricultural production efficiency is expected to enter a high-speed improvement channel after the implementation of genetically modified seeds, and build an agricultural power on the basis of ensuring food security.
Risk warning: uncertainty risk caused by bad weather; GM promotion is less than expected risk.
Investment suggestion: optimistic about the upward trend of grain price boom in 2022. On the one hand, it is good for the planting and seed sector. On the other hand, the rise of the cost of feed raw materials may accelerate the reversal of the pig price cycle, so it is optimistic about the investment opportunities of the pig sector. Specific targets: 1) planting sector: recommend Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) , and pay attention to Heilongjiang Agriculture Company Limited(600598) . 2) Relevant Shenzhen Agricultural Products Group Co.Ltd(000061) section: recommend Cofco Sugar Holding Co.Ltd(600737) and pay attention to China Hainan Rubber Industry Group Co.Ltd(601118) . 3) Seed sector: recommended Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) , Shandong Denghai Seeds Co.Ltd(002041) , etc. 4) Recommendations for pig breeding sector: Zhejiang Huatong Meat Products Co.Ltd(002840) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Leshan Giantstar Farming&Husbandry Corporation Limited(603477) , Tecon Biology Co.Ltd(002100) , Dongrui Food Group Co.Ltd(001201) , COFCO Jiakang, Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , etc.
