Sugar cycle inflection point looming

1comment 2019-04-15 01:36:58 source:China Securities Journal Author:Ma Shuang The second beauty energy comes!

Since April, the sugar sector's stock market performance has been outstanding, and Zheng sugar futures' main contract of 1909 has increased by 6.28%. In terms of A shares,COFCO Sugar Industry(Quotes600737,Medical stock), ST South Sugar,Guangdong and Guangxi shares(Quotes000833,Medical stockThe cumulative increase was 21.33%, 24.12%, and 12.13%, respectively. Analysts said that recentlyWhite sugarThe rise in the price reflects the market's more optimistic expectations for future sugar price performance, which is expected to improve the operating status of sugar companies, so the linkage of sugar industry stocks rose. From the perspective of the sugar cycle, it is currently at the end of the three-year bear market, and the market outlook is expected to enter the bull market cycle.

  The linkage of the stock index

Since last week, the Zheng sugar futures price has accelerated and rebounded. The main contract of 1909 has risen to 5,369 yuan/ton at the highest level, setting a new high since June 15, 2018. The latest closing price is 5,364 yuan/ton, which has increased by 6.28% since this month.

In terms of A shares, the recent performance of sugar stocks is also more prominent. Since April, as of last Friday's close, COFCO Sugar, ST South Sugar, and Guangdong and Guangxi shares have increased by 21.33%, 24.12% and 12.13% respectively;SSEThe KLCI was up 3.17%.

Founder Interim Futures White Sugar Researcher Zhang Xiangjun said that recentlyWhite sugar futuresThe price increase reflects the market's more optimistic expectations for future sugar price performance. Higher sugar prices will significantly improve the operation of sugar companies and increase the sugar industry.Listed companyThe profit or loss reduction, so the sugar stocks and futures sugar prices rose.

  CITIC Construction Investment(Quotes601066,Medical stock)futuresAgricultural products(Quotes000061,Medical stockThe research team also said that the recent rise in white sugar futures reflects the market's confidence in future sugar price increases. At the same time, the spot market is also responding in the same direction, and recently the purchase of traders has also increased. Supported by this, the ex-factory price of the sugar factory was significantly boosted. Under the expectation of rising sugar prices, the rise in sugar stocks indicates that the market is expected to gradually improve the profit recovery of sugar companies, and the performance turning point has already appeared.

From a cycle perspective, Zhang Xiangjun said that domestic sugar has been increasing for two consecutive years, but it is under pressure from low sugar prices. It is expected that production in 2019/2020 may be roughly the same as this year; in the international market, it is also shifting from surplus to shortage.

"From the perspective of the sugar cycle, it is currently at the end of the three-year bear market. The sugar price has already fallen below the cost price and is at the bottom of the low level. It has caused obvious pressure on the main business of leading sugar companies such as Nanning Sugar and COFCO." The research team said.

  Expected to enter the bull market cycle

Historically, the sugar market has often shown some characteristics during the transition period. According to the CITIC Jiantou Futures Agricultural Products Research Team, Zheng sugar futures contracts will be converted in multiple short positions; in terms of basis, the positive and negative markets are also changing; the spot market sentiment is also worthy of attention, when the market turns bear, bearish It is expected to strengthen, traders and terminal purchases will slow down, and there will be a psychology of buying and selling. When the market turns to cattle, the psychology of stocking in advance will appear.

“The conversion of sugar and bears in the sugar market is mainly caused by the cycle of increase and decrease of sugar production, and the increase or decrease of production is mainly affected by the price of sugar. Generally speaking, the price of sugar in the domestic market will rise after two or three consecutive years of rising or falling. The cycle has changed. The recent bear market started from the beginning of 2017, and it has been two years since the sugar price bottomed out at the beginning of this year." Zhang Xiangjun said.

For the market outlook, Zhang Xiangjun said that domestic sugar prices are expected to enter the bull market cycle, sugar factory profitability is expected to improve, and the stock price is also beneficial. However, it is not recommended to chase after high, sugar price futures, sugar market stocks in the fallback period is better to buy.

The research team of CITIC Jiantou Futures Agricultural Products said that in the future, it will continue to be optimistic about the profit recovery and improvement of sugar factories, and the industrial concentration will be improved, and the leading enterprises will be more favorable, and the stocks of high-quality sugar products will be increased. In the futures, conservatives in the period of bear cattle conversion can carry out anti-sets. Operation, the radicals continue to do more on dips.

Keyword reading:White sugar

Editor in charge: Fu Jianqing RF13564
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