Food crisis, epidemic shock, shipping obstruction, Fed interest rate hikes. Over the past few months, neither the world nor the market has been peaceful.
The inflationary environment is combined with weak market demand, and the bull market of commodities is coming to an end, and the tail of the commodity bull market is generally sung by agricultural products. In line with the attributes of agriculture as a just-needed industry and a hedging industry, the market pays a lot of attention to agriculture and agricultural products. Whether it is a pig at the trough of its own cycle, or a seed industry facing policy opening, as well as a booming oil.
China's agriculture has bid farewell to the demand-driven, quantity-driven model, and must seek opportunities brought by supply optimization, quality promotion and industrial upgrading. We must also bid farewell to the thinking of "carving a boat and seeking a sword" in the cycle, and meet the challenges and new life under the change.
Whether the investment in the pig industry can truly improve the production efficiency of breeding, so as to establish industrial barriers to achieve excess returns, is the core indicator that determines whether it has long-term investment value. From the perspective of pig prices, the current weak reality gives us the conditions to build the bottom of the price, and the short-term emotional fermentation also gives the market the stimulation to open up imagination space. We believe that after the cold winter, we will inevitably usher in a new life, but the existence of "spring cold" also has to be vigilant.
The mood shift in the cycle is often ahead of the change in real supply and demand, especially the market consistency expectation is strong, which can easily lead to the advance layout of some market participants. In the case of pigs, for example, the upward trend of emotions can come from the restrictions of transportation, the sudden stockpiling of epidemics, and the stimulation of other occasional events. And the mood of the market is not an empty and weak roar, but a core factor that can influence decision-making and ultimately lead to changes in the rhythm of supply and demand. We say that "the price upwards push the prices upwards", and the connotation is that emotions can well transform the bullish psychology into a decision to suppress the sale. Emotions drive too many changes in the supply and demand environment, then it will inevitably be suppressed by supply and demand itself, and even the reversal of emotions, from high to panic, breeding decisions may also change from reluctance to sell to accelerated out of the bar.
The cotton market continues to advance under pressure, high cotton prices continue to transmit downstream, and the economic environment is also putting pressure on demand, we believe that the strength of cost and external support is only accumulating contradictions, and the outbreak of contradictions is often only in a casual moment. The oil and fat market is strongly supported by the energy market, and the accumulation of oil and fat under the strong biofuel is limited, and in the context of the supply has not yet improved significantly, it is not time to sell short, mainly to pull back to buy.
The following are the monthly strategies for each variety
Pig
Unilateral: range is strong shock, speculative pullback to buy, hedging waiting for highs
The core contradiction is still on the supply side, the bottom of reality is basically confirmed, the emotions are opened and boosted, and the upward wave is three folds.
Supply peak cashing into the second half:
(1) Last year, the high point of breeding sows was in May and June, considering factors such as sow pregnancy and piglet production efficiency, while considering seasonal adjustments, the peak of supply corresponding to this year's off-season supply was actually from March to April, and has now entered the second half;
(2) The market bottomed out in the pessimistic mood in March, and the slaughter volume confirmed the change in supply;
(3) The weight remains stable, and a large amount of production is not transferred backwards, which slows down the price pressure.
Emotions lead the substance, expectations lead the reality
(1) The promotion of spot market sentiment has led to short-term fluctuations in prices, which has promoted the sentiment of the futures market;
(2) Market participants often want to make decisions one step ahead, regardless of the futures spot, there may be emotions ahead of the actual situation;
(3) The emotional rhythm is too advanced, and it will inevitably be suppressed by reality, and the entire upward cashing process is full of twists and turns.
Risk: Market panic, spot more than expected to go down; inventory destocking less than expected.
grease
Unilateral: the overall strong view, pullback to buy, cautious chase
Oil-meal ratio: phased optimism
The supply and demand of the oil and fat market are weak, there is no too prominent contradiction, and the 05 basis convergence supports the short-term disk trend.
International market: limited accumulation, energy support
(1) South American soybean production decreased by 27 million tons year-on-year, and the intended area of U.S. beans was 91 million acres, but the pressure on U.S. beans under strong demand was limited;
(2) Horse palm production in March has not yet recovered year-on-year, the international bean palm spread has been repaired significantly, and the accumulation pressure is not large;
(3) The progress of the Negotiations between Russia and Ukraine is difficult, Europe and the United States continue to escalate sanctions against Russia, crude oil is strong and difficult to change, and spring sowing in the northern hemisphere is disturbed;
(4) The implementation of the firewood policy of major countries represented by the United States and Indonesia is resolute, and the strong crude oil or the new policy may form a stimulus.
Domestic market: policy regulation, contradiction postponement
(1) From April to May, soybeans arrived at Hong Kong at 18 million tons+, superimposed soybean auctions continue to auction, crushing volume is expected to rebound, while short-term demand is affected by the epidemic;
(2) Under the suppression of high prices, palm oil is only just needed, but the monthly import of palm oil has dropped to tens of thousands of tons, the inventory has continued to be low, and the basis is still high;
(3) Canada's old crops are not enough to buy ships, and domestic rapeseed gives a big squeeze profit, and with the new seed on the market, there may be more big squeeze to open, but the number is limited.
Risks: Reserves are released more than expected, Indonesia's output has soared, and the Conflict between Russia and Ukraine has been resolved faster than expected
corn
Unilateral: Go long at a low price
Monthly: 5-9 spread to expand
Corn starch: the spread is shrinking, pay attention to the May Day delivery
(1) Under the influence of the epidemic, it is currently facing the reality of weak demand, but there is still just need for support at the bottom;
(2) Under the background of the far-month market pricing tendency cost logic and the limited expansion of planting area, the price of ground rent fertilizer has increased in an all-round way, and the cost increase effect is obvious;
(3) Overseas grain markets are strengthening, and factors such as the Russian-Ukrainian conflict, the increase in demand for ethanol in the United States, and the frost in Argentina continue to support prices.
pulp
Unilateral: the shock is strong, and the pullback is long
The disturbance at the international end continues, the external quotation is expected to continue to rise, and the pulp price is expected to move up again with the cost of imports
(1) The tension of the international supply chain is gradually verified by the data: the import volume of softwood pulp in March was 590,000 tons, an increase of 7.9% month-on-month and a decrease of 22.3% year-on-year, and the cumulative import volume of softwood pulp in the first quarter was 1.773 million tons, a year-on-year decrease of 19.1%;
(2) In the second quarter, the supply is still expected to tighten, and the UPM strike in Finland was again postponed to May 14; according to agency statistics, the production capacity affected by the UPM strike includes 2.3 million tons of cultural paper and 1.5 million tons of commercial pulp per year; the Illim pulp mill, which has 75% of the pulp production capacity in Russia, began to suspend the supply of softwood pulp at the end of March due to equipment maintenance problems, and the recovery time is uncertain.
(3) May silver star quotation of 1010 US dollars / ton, up 20 US dollars from the previous month, in Canada, Finland and other major production countries supply problems, is expected to rise steadily in May foreign quotations; Chilean silver star import costs of more than 7300 yuan / ton, the current disk surface of a small discount import cost, there is still a certain space above the pulp.
cotton
Unilateral: High volatility is under pressure, and short selling at high
Inter-Month: Try how far and near
Uncertainty on the supply side awaits confirmation, and the expectation of supply increase and production is disappointed and the expectation of consumption collapse is expected to be fulfilled.
(1) The pressure of abundant domestic fundamental supply and weak demand, the space above the price narrowed;
(2) The sales progress of lint cotton is lagging behind significantly, and it is difficult to transmit high prices downwards, the Ban on Xinjiang Cotton continues to ferment, and the market share of Cotton Textiles in China declines;
(3) The US market enters the capital game link and breaks away from the fundamentals;
(4) Supply side: the expected increase in production in the southern hemisphere is gradually landing, and the expansion expectations in the northern hemisphere are facing tests;
(5) Consumption: The negative impact of Khmer prices on the industrial chain is intensifying; the signal of the US market peaking is enhancing The growth rate of cotton textile imports has slowed down year-on-year.
sugar
Unilateral: Oscillation, little chance of operation
Domestic supply is significantly affected by imports, and import costs are an important reference for Zheng Sugar's operation.
(1) In the 21/22 year, the global supply shortage and short pattern is doomed, the market gradually digests the fact that India has increased production significantly, and the focus of speculation has shifted to Brazil, which has postponed the opening;
(2) Raw sugar is still trading "the expectation of the downward adjustment of the Brazilian sugar ratio", but the upward momentum is not as good as in the previous period, so the trend of raw sugar and Zheng sugar is dominated by high volatility;
(3) Ethanol prices are close to 4 cents/lb above the raw sugar premium, and the convergence of the ethanol-raw sugar price difference is expected to depend mainly on the decline in ethanol prices;
(4) The domestic market is still at the high point of inventory, and the contradiction between internal and external price differences continues.
This article is derived from the CFC Agricultural Research