Changjiang Securities·2026-03-17 05:05Investment Rating - The report maintains a "Positive" investment rating for the agricultural sector [11] Core Insights - Recent declines in pig prices, with the lowest recorded at 10.2 CNY/kg in mid-March, have led to over five months of industry losses. This situation is expected to accelerate the elimination of breeding sows, initiating a market-driven capacity reduction in pig farming [2][6] - The competitive landscape in the pig farming industry is anticipated to improve, favoring companies with cost advantages and strong cash flow, which are expected to enjoy prolonged profit cycles. Recommended companies include Wens Foodstuffs Group, DeKang Agriculture, and Shennong Group [2][7] - Geopolitical issues are driving up planting costs in major agricultural regions, which may lead to rising prices for major agricultural commodities such as soybeans, corn, and wheat. Recent increases in soybean meal prices indicate a significant uptick in market conditions [6][9] Summary by Sections Pig Farming - As of March 13, 2026, the average price of pigs is 10.28 CNY/kg, down 31% year-on-year and 1% month-on-month. The price of weaned piglets has also decreased, with 7 kg piglets priced at 326 CNY/head, a 32% year-on-year drop [19] - The industry has faced over five months of losses, with cash flow pressures becoming increasingly evident. The current oversupply of pigs and the seasonal decline in consumption are likely to keep prices at the bottom for March and April [7][19] - The report emphasizes that high-cost farming entities will be the first to exit the market, highlighting the core competitiveness of low-cost farming enterprises [2][7] Beef Farming - Beef prices have been on the rise since 2026, with the price of fattened bulls at 25.79 CNY/kg, up 8% year-on-year. The price of calves has surged by 40% year-on-year, indicating a robust market [8][35] - The report suggests that the current cycle of beef farming may last over two years due to tightening global beef supply and the implementation of import quotas by the end of 2025 [8][42] Other Agricultural Products - As of March 13, 2026, corn prices are at 2329 CNY/ton, up 6% year-on-year, while soybean meal prices are at 3474 CNY/ton, showing a 10% month-on-month increase. Wheat prices have also risen by 6% year-on-year [65] - Geopolitical tensions are expected to continue influencing agricultural prices, with potential disruptions in trade routes affecting supply chains [6][9]