Talking about the pig cycle, a few days ago the CPI for November was announced, down 0 percent year-on-year5%。
Some people say that the responsibility lies with the pigs, because the price of pigs has fallen, and the CPI has fallen.
It is not unreasonable that there has always been a saying in the market that "pig price kidnaps CPI", which means that the weight of pig price in CPI is very large.
In November last year, the pig ** was still 25 yuan kg, and in November this year it has fallen to 15 yuan kg, a drop of 40%.
The drop is so big, don't drag the CPI back.
But there is also a saying in investment, the dilemma is reversed, and if it falls too much, it will rise.
It's notToday's pork ** intraday strong limit.
Flip forward,Since October 24, the pig breeding sector has risen by 1891%, ranking 10th among more than 200 Shenwan** industries.
In a trance, a new round of pig cycle seems to be about to start, is this really the case?
Let's start with a brutal fact:
The big guy who is still sticking to the pig cycle is Zhou Weiwen.
This round of pig prices bottomed out in June 2021, and it has been 2 and a half years since then, but ** has been full of twists and turns, pig prices have not risen for a long time, and breeding ETFs have hit a new low, and many people have cut their positions and left the market.
For example, Jin Zicai, in 2022, he will be heavy in the pig cycle, and the agriculture, forestry, animal husbandry and fishery industries once accounted for 63% of the world's largest pigs, but it was chopped off in the fourth quarter.
Now let's look at the positionThe big guy who is still holding on is Zhou Weiwen.
The few ** he managed have bought Muyuan shares into the first heavy stocks, and ** is much higher than the second largest heavy stocks, so there is no need to say much about optimism.
How accurate was the judgment of the big guy that week?
It should be said that it is quite high.
Review his operation on Muyuan shares, the last round of pig cycle, he participated.
In the fourth quarter of 2018, it began to reposition and did not reduce until the fourth quarter of 2019.
Corresponding to **, it is just at the bottom of the pig price (12 yuan kg), and it is also the bottom of the stock price of Muyuan shares.
Then in the fourth quarter of 2019, the pig price rose to the top of 40 yuan kg and began to reduce the position, and the whole thing was eaten by a wave of big **.
In this wave, he began to increase his position in the quarter of 2021, when the pig price fell to a low of 12 yuan kg.
In hindsight, it is quite accurate, the price of pigs is up, and the share price of Muyuan shares is also up.
Then in the third quarter of 2022, after the pig price rose to 23 yuan kg, Zhou Weiwen increased his position again, and bought Muyuan shares into the largest heavy stock in one fell swoop, ** at about 6%, and has been getting it now.
But unfortunately, this time I bought at the top, and then the pig price fell back to 14 yuan kg, plus it was not good, the share price of Muyuan shares all the way, and hit a new low.
Zhou Weiwen Muyuan's position should still be a loss, but he has been getting it now, the reason is "dilemma reversal", in the quarterly report he often said such a sentence: "good industry choose alpha, dilemma reversal industry choose beta".
Why is this round of pig cycle full of twists and turns?
Looking at another data, the yellow line is the number of sows that can reproduce, and the blue line is the number of live pigs.
In 2018, due to the rapid spread of African swine fever, the number of fertile sows declined rapidly, from 31 million to less than 20 million in just one year.
What are sows used for?
Piglets are born, and then the piglets are raised to become fat pigs, which are slaughtered and sold for money.
Because the sow decarbonization is too serious, once the pig cycle starts in 2019, it will soar, and the pig ** will rise from 12 yuan kg to 40 yuan kg, which is about twice as high as the previous historical highest.
What's even more exaggerated is the piglet, ** from 21 yuan kg to 135 yuan kg, an increase of more than 5 times.
What are the consequences of the increase in piglet prices?
In just one and a half years, the number of fertile sows has doubled from less than 20 million to 45 million, 14 million more than before African swine fever.
Then there was overcapacity, and hogs and piglets were quickly dried up back to the starting point.
However, farmers are reluctant to withdraw, and the number of sows that can reproduce has remained high, and the price of pigs has even increased from April to October this year.
Excess capacity has been unable to exit for a long time, which has led to the twists and turns of a new round of pig cycle.
And what about the latest wave of **?
Let's also be clear about the facts:
The pig price is still lying at the bottom.
The ** of the pig is 15 yuan kg, and the ** of the piglet is 245 yuan kg.
Even the breeding sow herd is high, at 42.1 million, 11 million more than before the 2018 African swine fever.
However, many people expect that the production capacity of the pig industry will accelerate next year.
If you look at the data, this year, whether it is low-cost self-breeding or high-cost purchased piglets, they have suffered serious losses. Muyuan, known as the lowest cost in the industry, lost 1.8 billion yuan in the first three quarters of this year, with an average loss of 38 yuan per pig sold.
Losses are the best means to reduce capacity, and many brokerages look forward to next year and say that the speed of industry capacity may accelerate nonlinearly, thereby promoting the bottom of the cycle reversal.
In addition, it is related to the resurgence of African swine fever.
According to a survey, African swine fever has appeared in some northern provinces.
Some people also believe that it is related to the increase in demand for pork driven by pre-holiday stocking and winter pickling.
Therefore, although the pig price has not yet responded, some funds have acted in advance, and since the end of October, the breeding ETF has bucked the trend and walked out
Of course, the last thing to remind is that the number of sows that can reproduce is still high, 42.1 million, more than 11 million more than before African swine fever.
And the market expects a new round of pig cycle to start several times, but it has failed, and it is difficult to say when pig prices will rise
*Disclaimer: The content of the article is for informational purposes only and does not constitute investment advice.