Focus this week: pork will meet the consumption peak of the Spring Festival, and the price may stop falling and stabilize
[pigs] the average price of pigs this week was 14.02 yuan / kg, down 1.48% on a weekly basis. The average wholesale price of pork was 22.05 yuan / kg, down 0.94% on a weekly basis. Affected by the decline of pig prices in the early stage, the enthusiasm of pig breeding in most areas is not high, but the overall enthusiasm of pig marketing is OK. Next week, in the last week before the Spring Festival, a small number of retail investors with equivalent hurdles in the early stage will also be listed, and the marketing volume may remain relatively high. In addition, with the upcoming peak demand, the slaughter volume of pigs or phased increase, and the sales volume in local markets will increase, Therefore, meat prices are expected to rise slightly next week. ① In terms of feed, this week, except that the average price of corn decreased slightly by 0.12% month on month, the average price of soybean meal and bran increased, and the output was basically stable. It is expected that the price of pig feed will rise slightly next week. ② In December 2021, the number of fertile sows in China was 43.29 million, up 0.77% month on month, slightly higher than the normal number of 41 million. This is the first positive growth after five consecutive months of correction. With the overall upward movement of the pig price operation center in the second half of the year, the time point for the worst performance of breeding stocks has passed, and the rapid increase of enterprise production capacity will raise the valuation bottom of the sector as a whole. If we only focus on the cycle and ignore growth, it is very easy to miss the allocation opportunity. Once again, we emphasize that this cycle should pay special attention to enterprises with both financial stability and growth. It is suggested to pay attention to Wens Foodstuff Group Co.Ltd(300498) (continuous improvement of operation, stable growth of production capacity guaranteed by the mode of company + breeding community + farmers) and Tangrenshen Group Co.Ltd(002567) (whole industry chain operation, excellent performance in various financial indicators), Secondly, focus on COFCO Jiakang (backed by COFCO group, it has the cost advantage of raw feed grain and the rapid expansion of production capacity).
[seed industry] this week, the spot prices of corn and wheat were 2726.4 yuan / ton and 2874.8 yuan / ton respectively, down 0.2% and up 0.3% week on week. In addition, this week witnessed the largest volcanic eruption in 30 years – Tonga volcanic eruption. Historically, the later stage of each large-scale volcanic eruption will lead to a decline in global temperature, which poses a threat to food production. At present, there is no literature or evidence to support the direct relationship between volcanic eruption and La Nina El Nino weather switching, and the impact of volcanic eruption on rainfall or temperature will generally appear in the next year. We believe that Tonga volcano is far away from the main grain producing areas in the world, and the sulfur dioxide emission is far lower than that of previous volcanic eruptions, so it is unlikely to affect the crop production this year. However, in the future, the actual temperature impact caused by volcanic eruption needs to be determined by the final duration and the cumulative injection of sulfur dioxide. Especially under the background of low global food inventory level, the weather threat will persist for a long time. Pay special attention to the weather changes in corn, soybean, white sugar producing areas in North and South America and palm and rubber producing areas in Southeast Asia. Even if there is no weather threat from volcanoes, the National Meteorological Center predicts that China’s climate will still be unfavorable to food production in 2022, probably showing a situation of “dry in the middle, waterlogging in the north and South”, and potential threats to wheat in the middle, rice and sugar in the South and corn production and planting in the north. We believe that the theme of food security will run through 2022, focusing on the relevant targets of seed industry ( Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) , Winall Hi-Tech Seed Co.Ltd(300087) ) and other relevant investment opportunities.
Risk warning: the slaughter volume of pigs is lower than expected; Shenzhen Agricultural Products Group Co.Ltd(000061) the price fluctuates greatly; The outbreak exceeded expectations.
