Report Overview - Report Title: "Agricultural Products: Cobweb Pricing, Prepare Boats in Drought - 2026 Agricultural Market Outlook" [1] - Report Date: February 6, 2026 - Analysts: Zhou Xiaoqiu, Wu Hao 1. Report's Investment Rating for the Industry - The provided content does not mention the report's investment rating for the industry. 2. Core Views of the Report - Agricultural products are typical cyclical commodities with seasonal production and annual sales, and their pricing follows the cobweb model [3][48]. - Agricultural product prices are at historical lows, with highly predictable positive drivers and a high risk - return ratio [3][48]. - Although the overall global agricultural product output is still increasing, the increment mainly comes from South America, with a high concentration. Global resource nationalism is intensifying, and geopolitical risks remain, increasing the risk premium of essential agricultural products [3][44][48]. - In 2025/2026, the inventory - to - consumption ratios of global rice, corn, and soybeans decreased. The prices of corn and soybeans are relatively low compared to precious metals and non - ferrous metals and have fallen below the US planting cost for two consecutive years [3][48]. - It is highly predictable that the US will reduce the planting area in 2026/2027 due to low planting profits. Weather premium trading weight is increasing [3][48]. - The domestic hog price has fallen below the self - breeding and self - raising production cost since September 2025, with the possibility of passive capacity reduction during the consumption off - season. It is recommended to focus on the opportunities driven by the biodiesel policy for oils, the expected opportunities for the rapeseed - soybean meal price difference due to improved China - Canada relations, and the hog cycle reversal opportunities [3][44][48]. 3. Summary by Relevant Catalogs 3.1 Agricultural Product Prices Are Relatively Low - Since September 2025, gold has started a new upward trend. The expected Fed rate cut has increased the attractiveness of precious metals, the weakening of the US dollar's credit has led to "de - dollarization" trading, and new consumption in AI computing power, energy storage, and photovoltaics has boosted the demand for precious metals [6]. - Since November 2025, silver has become the new leader in price increases, and the gold - to - silver ratio has accelerated its decline. Silver supply is limited by associated mining, and its demand has increased rapidly in new energy vehicles, energy storage, and photovoltaics [8]. - Since November 2025, non - ferrous metals such as brass and aluminum have seen accelerated price increases, and in mid - December 2025, nickel with high inventories also started to make up for the price increase, spreading to the entire non - ferrous metal sector [10]. - Agricultural product prices are at a historical low level. Compared with the prices of precious metals and non - ferrous metals, the relative position of agricultural product prices is low. Even after the recent sharp correction of precious metals and non - ferrous metals, this situation has not changed [12]. 3.2 The Fundamentals of Agricultural Products Are Gradually Improving - As of January 2026, USDA expects the global grain output in 2025/2026 to reach a new high (+4.2%), with rigid demand growth (+2.8%). The inventory - to - consumption ratios of rice, corn, and soybeans have decreased [13]. - In 2025/2026, the global rice output decreased by 0.03%, wheat output increased by 5.16%, corn output increased by 5.29%, soybean output decreased by 0.34%, rapeseed output increased by 10.66%, palm oil output increased by 2.31%, sugar output increased by 4.58%, and cotton output increased by 0.80% [15][17][20][24]. - The US soybean has been in a loss - making state since 2024/2025, with a loss of $96.4 per acre, and the US corn has also been in a loss - making state since 2024/2025, with a loss of $130.15 per acre [36]. - From October 2024 to now, the CBOT corn and soybean futures prices have been fluctuating at a low level, and it is expected that the US corn and soybean planting will continue to be in a loss - making state in 2025/2026 [38]. - The El Niño index has been negative since September 2024, and in January 2026, it was - 0.5, in a weak La Niña state, which is beneficial to the crop yield [40]. - USDA expects the US corn yield per acre in 2025/2026 to be 186.5 bushels, and the soybean yield per acre to be 53 bushels. The Brazilian corn yield per hectare in 2025/2026 is expected to be 5.8 tons, decreasing for two consecutive years, and the soybean yield per hectare is expected to be 3.63 tons, at a historical high level [42]. - The hog price has fallen below the self - breeding and self - raising production cost since September 2025 for 16 weeks, and after a short - term low - profit stage in January 2026, it is expected to continue to be in a loss - making state during the consumption off - season. Once the market enters the passive capacity reduction stage, the cycle reversal opportunity should be noted [44]. 3.3 Cobweb Pricing, Prepare Boats in Drought - Agricultural products are typical cyclical commodities, with seasonal production and annual sales, and their pricing follows the cobweb model [46]. - In 2025/2026, the US corn and soybean yields are at historical high levels. The market focuses on the expected reduction of the planting area in the US in 2026/2027 due to continuous negative planting profits. If the expectation is confirmed from March to May 2026, the weight of weather premium will increase from July to August [47]. - The prices of agricultural products are at historical lows, with highly predictable positive drivers and a high risk - return ratio. The relative position of corn and soybean prices compared to precious metals and non - ferrous metals is low, and it is highly predictable that the US will reduce the planting area in 2026/2027 [48].

Livestock Industry - The Ministry of Agriculture and Rural Affairs emphasizes strict implementation of capacity control measures in the pig farming industry, including reducing the breeding sow inventory and controlling the weight of pigs for slaughter [1] - As of the end of October 2025, the breeding sow inventory was reported at 39.9 million heads, a decrease of 450,000 heads from September, indicating a significant decline in the national sow inventory [1] - The report predicts that the breeding sow inventory in the pig industry is expected to continue declining in the first half of 2026 [1] Beef Cattle Farming - The beef cattle farming industry is similar to the pig farming industry, characterized by low concentration and significant information asymmetry, which may lead to substantial price elasticity and expectation differences due to prolonged losses and capacity reduction [2] - There is a strong correlation between beef and raw milk prices over the long term, and when beef prices rise, dairy farms may sell dairy cows as fattening cattle, reducing the supply of raw milk and creating a linkage effect between meat and milk prices [2] Poultry Farming - The introduction of grandparent chickens is gradually recovering, maintaining high levels of inventory, with no significant signs of reduction in the short term [3] - As of the 48th week of 2025, the inventory of parent stock chickens was reported at 1.3417 million, at a historical high, with parent stock chick sales reaching a record high of 2.0059 million sets [3] Agricultural Products - For palm oil, the forecast for 2026 indicates that aging trees and reduced rainfall in production areas may hinder sustained high output, with demand being a major driver of prices [4] - The total national sugar production for the 2025/26 season is estimated to reach 11.7 million tons, with a narrowing supply-demand gap and increased imports leading to a short-term easing of domestic supply [4] New Planting - The price of cordyceps has remained high due to supply constraints, and achieving large-scale, low-cost, high-quality production requires ongoing investment in research and development [5] - Companies like Zhongxing Junye are increasing their focus on artificial cordyceps cultivation, indicating potential growth opportunities [5] Investment Recommendations - For pig farming, companies to watch include Muyuan Foods, Wens Foodstuff Group, Dekang Agriculture, and Tiankang Biological [6] - For beef farming, recommended companies include Youran Agriculture, Modern Farming, and Bright Food Group [6] - In new planting, attention is suggested for Zhongxing Junye, Hualv Biological, and Xue Rong Biological [6]

Core Viewpoint - The recent investigation of a major alumina plant in Hebei, combined with the cancellation of mining licenses for Emirates Global Aluminium (EGA), has led to a significant increase in alumina prices, with the main contract rebounding by 5.8% over two trading days. This rebound is attributed to both news-driven market sentiment and improvements in the supply-demand fundamentals [1][4][21]. Group 1: Market Sentiment and News Impact - A news report regarding a major downstream alumina plant has stirred market sentiment, with the plant planning to produce a total of 4.8 million tons of alumina this year across three production lines. The first line has already started output, while the second line was expected to come online soon, potentially increasing total operational capacity to 10.922 million tons. If the plant is shut down, it could alleviate short-term supply pressure [4][21]. Group 2: Supply-Demand Fundamentals - The supply-demand fundamentals for alumina are showing signs of change, with four key aspects identified: 1. The recent expansion of maintenance activities in alumina production areas, including those with cost advantages in Guangxi. 2. The operational capacity ratio of alumina to electrolytic aluminum dropped from 2.07 to 1.95 within a week, before slightly recovering to 1.98. 3. The ongoing inventory reduction since late April, with downstream electrolytic aluminum plants maintaining only essential purchases. 4. The concentration of capital in short positions has led to a reduction in short positions, contributing to the price rebound [7][8][12][15]. Group 3: Future Scenarios and Long-term Outlook - Two scenarios are considered regarding the future of the major plant's capacity: 1. If the plant continues operations, the constructed capacity ratio would be 2.42, indicating a potential oversupply situation. 2. In an extreme case where the plant's new capacity exits the market, the constructed capacity ratio would drop to 2.35, still above historical levels, suggesting that even with this exit, the supply-demand balance may not significantly improve in the short term [19][20]. - Overall, while the recent maintenance and news have led to a short-term price rebound, the long-term supply-demand surplus remains unchanged, indicating a cautious outlook until further clarity is achieved [21].

Group 1 - The core viewpoint of the news highlights the impact of the H5N1 avian influenza outbreak on poultry prices, leading to a rise in the agriculture sector, particularly in the livestock segment [1] - The Agricultural 50 ETF (159827) showed strong performance, with an intraday increase of 1.8% and a closing rise of 1.11% [1] - The UN Food and Agriculture Organization warned of an unprecedented spread of the highly pathogenic H5N1 avian influenza, resulting in the death of hundreds of millions of birds globally and its further spread to mammals [1] Group 2 - In February 2025, the average price of white feather broiler chicks was 2.19 yuan per chick, down 0.30 yuan month-on-month and down 1.99 yuan year-on-year; the average price of white feather broilers was 3.09 yuan per jin, down 0.54 yuan month-on-month, a decline of 14.88% [3] - The market is currently characterized by strong supply and weak demand, leading to a decrease in average broiler prices; however, with easing cost pressures and stabilization in chicken prices, the profitability of the breeding industry is expected to gradually improve [3] - The overall price-to-earnings and price-to-book ratios of the agriculture, forestry, animal husbandry, and fishery sector are below historical averages, indicating potential for valuation recovery in the future [3]