This week’s view:
Planting industry chain: the average spot prices of corn, wheat and soybean in China this week were 280014, 319578 and 527831 yuan / ton respectively. The latest wasde report of the U.S. Department of agriculture in March has been released, increasing the global corn output by 790000 tons and reducing the global corn import by 2.54 million tons. Affected by Ukraine, the U.S. corn export is optimistic, increasing the export by 1.9 million tons; In terms of soybeans, USDA continued to reduce South American soybean production, and the tight balance trend of global soybean and corn remained unchanged. On the other hand, the supply and demand report of China’s Ministry of agriculture and rural areas was released in March. The supply and demand of soybeans and corn in China has not been adjusted. In terms of policy, the expansion of wheat diseases and pests has accelerated since March. On March 8, the state allocated 1.6 billion yuan for agricultural production and water conservancy disaster relief, focusing on supporting the strengthening and stable yield of crops and the prevention and control of diseases and pests, so as to stabilize the yield of summer grain. In addition, the new seed law was officially implemented in March, the substantive derivative variety system was implemented, and the collection of seed resources was more targeted, which significantly promoted breeding innovation and increased property rights protection. Under the policy, the expectation of improving the fundamentals of the seed industry is relatively perfect, and the listed companies related to the seed industry may usher in an important policy window period. In terms of target selection, we mainly recommend Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) and Shandong Denghai Seeds Co.Ltd(002041) with obvious first mover advantage and Shandong Denghai Seeds Co.Ltd(002041) .
The perennial root of sugarcane is three years in China, but five to seven years in Brazil and Australia. This is the reason why the overall supply of sugar was relatively sufficient in the past and the price of sugar did not rise for many years, but the cycle will only be late and will not be absent. 2022 has been six years away from the high point of the previous cycle. Superimposed on the higher than expected rise of oil prices and the large release of global currencies, as well as the frequent occurrence of global extreme climate caused by sunspot movement in recent years, a new upward cycle of sugar has begun. In terms of target selection, the stable target focuses on recommending Cofco Sugar Holding Co.Ltd(600737) , the leader of China’s sugar industry, and the flexible target Nanning Sugar Industry Co.Ltd(000911) is expected to benefit fully.
In addition, we continue to recommend chemical stocks with a valuation of only 11 times Meihua Holdings Group Co.Ltd(600873) . We expect that the performance elasticity in 2022 will come from the production of new lysine capacity by the end of 2021. In the long run, the monosodium glutamate and amino acid industries are limited by the new capacity under the background of carbon neutralization, and the valuation center is expected to rise.
Pig breeding: according to the data of zhuyitong, the price of pigs continued to show an overall downward trend. The average price of pigs nationwide this week was 12.16 yuan / kg, down 2.69% on a weekly basis. Since the beginning of February, the national average pig grain price ratio has been continuously lower than 5:1, and the lowest is close to 4:1. It has been in the first-class early warning range for a long time, and relevant departments have started the central collection and storage of frozen pork. Since March 3, 2022, the central government has organized the collection and storage of 78000 tons of frozen pork. The collection and storage work of provinces and cities has also continued to promote. The confidence of farmers has been boosted, and the reluctance to sell may be improved. However, the overall demand for pork is still weak, and the effect of boosting pig prices is limited. It is not ruled out that the follow-up collection and storage will continue and intensify, or form a short-term support for pig prices. In terms of feed, due to the continuous catalytic impact of the conflict between Russia and Ukraine, the production and export of corn in Ukraine may be affected, which increases the uncertainty of global corn trade, the Shenzhen Agricultural Products Group Co.Ltd(000061) price outside China stands at an all-time high, and the breeding cost continues to be under pressure. On March 8, the auction of rice under the State Reserve Policy kicked off, putting in 1.8 million tons for the first time; On March 10, forage rice began to be auctioned and low-cost rice or used for corn substitution, but the substitution effect is generally limited, and it is difficult to improve the feed cost in the short term. From the historical point of view, the market value of some high-quality pigs has gradually dropped from the low level of breeding nodes. The choice of specific targets to choose from among among the specific targets is to be recommended in turn for the selection of specific targets, with the following to be recommended in turn: the0 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 8 , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Shenzhen Kingsino Technology Co.Ltd(002548) , etc. are expected to benefit fully.
Risk tips
The recovery process of pig production capacity is less than expected, the product sales is less than expected, and the commercialization process of GM is less than expected.
