CITIC Securities says 2026 should be a base year for bulk agricultural commodity
prices to bottom and rebuild momentum. International conflicts and El
Niño-related weather shocks are pushing up overseas planting-chain prices ahead
of domestic staples, which have stabilized at their lows. For 2027, a
historically strong El Niño, high farm-input costs, rising bioenergy demand and
a falling stocks-to-use ratio should reinforce production-cut expectations and
support further price gains. Hogs remain deeply loss-making; continued losses
plus policy-driven capacity cuts make a cyclical recovery likely in H2 2027.
Meat and poultry chains are showing a mild recovery; post-cycle animal health
appears to be bottoming and may rebound. Recommended 2027 positioning: 1. Early
exposure to a hog-cycle reversal—favor cost leaders, firms with strong
cash-distribution prospects, low-valuation names and companies diversifying into
cattle. 2. Operators with stable, cycle-resilient earnings and firms positioned
for post-cycle strength. 3. Plays across the crop/planting value chain. 4.
Pet-industry chains at an inflection point. 5. Agricultural processors and
suppliers of functional ingredients.
