The Zhitong Finance App learned that Huafu Securities published a research report saying that under the influence of fat pig premiums, Eryu maintained a certain level of entry in the early stages of last week, and pig prices rose narrowly; after pig prices rose, Eryu's enthusiasm weakened, and pig prices declined in the latter half of the week. After the National Day ended, downstream demand was relatively lackluster, and slaughter volume fluctuated narrowly; after the release of large pigs in the early stages, the stock of large pigs in the market declined, the supply of large pigs was tight, and the spread of fertilizer prices strengthened. Looking ahead to the future market, demand for pork will gradually improve as the national temperature drops. Against the backdrop of limited supply growth and prudent second-education operations, pig prices are expected to rebound during the peak season at the end of the year, and pig companies' profits are expected to continue to unleash. Currently, the industry's production capacity is slowly recovering. Due to the reduction in pig farm profits after the price of piglets fell, pig price expectations were lowered, and high industry debt suppressed production capacity. The boom range in this cycle is expected to lengthen, and leading low-cost pig companies are expected to reap excess profits.

Pig breeding: Pig prices fluctuated and adjusted, and the spread of fertilizer prices continued to widen.

1) Pig prices fluctuated downward last week. Fueled by the fat pig premium, Eryu maintained a certain level of entry in the early stages of last week, and pig prices rose narrowly; after pig prices rose, Eryu's enthusiasm weakened, and pig prices declined in the latter half of the week. On October 20, pig prices were 17.22 yuan/kg, or -0.93 yuan/kg from week to week. On October 1-10, the sales ratio of group companies was quite obvious, accounting for 6.09%, compared to September 21-30, +3.69pct. However, due to the recent weak operation of the market, the Eryu group mostly switched to a wait-and-see attitude, and the sentiment of filling up the column weakened.

2) Demand was lackluster after the holiday, and slaughter volume fluctuated in a narrow range. After the National Day, downstream demand was relatively lackluster, and the slaughter volume of slaughter companies fluctuated in a narrow range. On October 18, the slaughter volume was 0.0.1435 million heads, -0.24% from week to week. Frozen products are digested slowly. On October 17, the national frozen goods storage rate was 16.05%, -0.03 pct from week to week.

3) The supply of large pigs is tight, and the price difference between fertilizer standards is getting stronger. Against the backdrop of the widening price spread of fertilizer standards, the industry is definitely showing weight gain. The average weight of the industry listings last week was 126.34 kg, +0.47 kg from week to week. Among them, the average weight of the group increased by 0.29 kg, and retail investors increased 1.1 kg. After the release of large pig sales pressure in the early stages, the stock of large pigs in the market declined, and the price difference between 175 kg/200 kg and standard pigs continued to strengthen. On October 11-17, the price difference between 175 kg/200 kg and standard pigs was 0.56/0.95 yuan/kg, respectively, +0.11/+0.15 yuan/kg from week to week. On October 11-17, pigs weighing 150 kg or more accounted for 5.70%, +0.05pct from week to week. Looking ahead to the future market, demand for pork will gradually improve as the national temperature drops. Against the backdrop of limited supply growth and prudent second-education operations, pig prices are expected to rebound during the peak season at the end of the year, and pig companies' profits are expected to continue to unleash. Currently, the industry's production capacity is slowly recovering. Due to the reduction in pig farm profits after the price of piglets fell, pig price expectations were lowered, and high industry debt suppressed production capacity. The boom range in this cycle is expected to lengthen, and leading low-cost pig companies are expected to reap excess profits. It is recommended to focus on Muyuan Co., Ltd., Wen's shares, Huatong shares, superstar agriculture and animal husbandry, etc.

White feather broiler: The introduction is limited and transmitted step by step, and the white chicken boom is expected to rise.

1) The price of chicken seedlings declined slightly and remained high overall. The recent decline in surrogate surrogate stocks has led to a marginal decrease in the supply of commercial chicken seedlings. From September 30 to October 6, the Association monitored 90.3886 million birds' sales in some commercial chicken surrogates across the country, -0.22% from week to week and -2.15% compared to the same period last year. On the demand side, as time progressed, demand for supplementing the two batches of chickens released before the “Spring Festival” weakened, farmers' resistance to high-priced seedlings increased, and the price of chicken seedlings adjusted slightly. On October 18, the price of white feather broiler seedlings in the industry was 4.17 yuan/feather, -0.22% from week to week. On October 7-20, the price of chicken seedlings of Jiesheng Co., Ltd. remained at 4.9 yuan/feather. In addition, the reduction in chicken seedlings led to a tight supply of chicken, and the price of hairy chicken rose. On October 18, the price of white feather broiler in the industry was 7.43 yuan/kg, +1.23% from week to week.

2) The supply and demand pattern is expected to improve, and white chicken prices are expected to rise. Under the influence of the “flight restrictions+avian influenza” epidemic, the number of ancestral updates in 2022 fell by nearly 25% year-on-year. From an ancestral perspective, overseas introduction has continued to be limited since May '22. The promotion of domestic self-breeding varieties has increased the total amount of ancestral generations, but there may be problems of reduced efficiency due to structural changes. In terms of parents' generation, ancestral introduction was blocked in May '22. It was transmitted from generation to generation at 23H2 until the birth parent entered a downward channel, and there was a sharp decline in parent-generation registration. In terms of commodity generation, Huafu Securities judged that the reduction in commodity generation may have shown results in 24H1. In the future, with the gradual spread of restrictions on introduction, combined with subsequent boosting consumption and higher pig prices, white chicken prices are expected to rise. It is recommended to focus on Shengnong Development, Minhe Shares, and Yisheng Shares.

Seed industry: Five departments issued documents to support seed enterprise financing and help revitalize the seed industry. On August 5, the “Notice on Launching Special Actions to Learn and Apply the Experience of the “Ten Million Project” to Strengthen Financial Support for Comprehensive Rural Revitalization” was issued. The “Notice” proposes deepening seed industry revitalization and agricultural technology financial services, supporting the listing, listing and refinancing of eligible seed industry enterprises, and carrying out investmentmergers and acquisitionsand mergers and restructuring. The seed industry policy continues to be introduced, which is expected to promote the development, promotion and application of major varieties by seed industry enterprises, and accelerate the industrialization process of biological breeding. At present, several genetically-modified varieties have been officially approved in China. The commercialization of genetically modified genes will promote market space expansion and industry concentration, and leading breeding companies are expected to fully benefit from their first-mover advantage. It is recommended to focus on Dabeinong, Longping Hi-Tech, Denghai Seed Industry, and Quanyin Hi-Tech.

Risk warning

Risks such as the occurrence of animal diseases, commodity price fluctuations, and natural disasters.