Orient Securities·2026-03-08 08:16Investment Rating - The report maintains a "Positive" investment rating for the agriculture industry [5] Core Insights - The report highlights that the bottom price for live pigs is gradually being confirmed, and a price increase is expected as pessimistic expectations are likely to be reversed [3][12] - The report emphasizes that the current market expectations for pig prices are overly pessimistic, primarily due to the neglect of previous inventory depletion pressures on prices [12][21] - It is noted that the supply peak for live pigs has passed, and prices are expected to gradually rise as inventory replenishment begins [14][16] Summary by Sections Investment Recommendations and Targets - The report recommends focusing on the pig farming sector, anticipating improved performance in 2026 due to cost advantages for leading companies. Suggested stocks include Muyuan Foods (002714, Buy), Wens Foodstuff Group (300498, Buy), and Shennong Group (605296, Not Rated) [3] - For the post-cycle sector, the report indicates a structural growth trend, with profits in the breeding industry chain expected to gradually transmit downstream, benefiting the animal health sector. Recommended stocks include Haida Group (002311, Buy) and Ruipu Biological (300119, Not Rated) [3] - In the planting chain, the report notes that geopolitical factors have led to price increases in bulk commodities, with a positive outlook for grain prices. Suggested stocks include Suqian Agricultural Development (601952, Not Rated), Beidahuang (600598, Not Rated), Hainan Rubber (601118, Buy), Longping High-Tech (000998, Buy), and COFCO Sugar (600737, Buy) [3] - The pet food sector is highlighted as being in a growth phase, with increasing recognition of domestic brands and continuous growth of leading companies. Suggested stocks include Guibao Pet (301498, Not Rated), Zhongchong Co., Ltd. (002891, Not Rated), and Petty Holdings (300673, Not Rated) [3] Industry Fundamentals - The report indicates that the average price of live pigs is currently around 10.32 yuan/kg, with a downward trend observed. The market sentiment is dominated by bearish expectations, and the price is in a testing phase for its bottom [21] - The report notes that the number of breeding sows has decreased to 39.61 million heads by the end of 2025, a year-on-year decline of 2.92%, which is expected to alleviate supply pressure in the second half of 2026 [14] - It is mentioned that the core of current price fluctuations lies in inventory rather than production capacity, with the inventory cycle nearing its bottom, suggesting a potential upward trend in prices [16][17] Commodity Prices - The report states that corn, soybean meal, and wheat prices have risen, with corn priced at 2417.84 yuan/ton, up 1.13% week-on-week, and wheat at 2542 yuan/ton, up 0.28% [34] - The report highlights that the price of natural rubber has shown a downward trend, with futures prices at 16835 yuan/ton, down 1.87% week-on-week, but expects a strong price performance due to geopolitical factors and supply constraints [41]