The market is concerned about disaster shocks in the short term, and production reduction expectations lead to strong food prices:

When considering short-cycle attributes, agricultural prices will more reflect the weather and export policy factors of the main producing countries (on the supply side). On the one hand, natural disasters will cause great disturbance to grain production. On the other hand, the excessive concentration of global grain export capacity (nearly 75% of the world's corn export capacity is concentrated in the United States, Argentina and Brazil, and 95% of the world's soybean export capacity is concentrated in the United States, Brazil and Argentina). When certain countries or varieties are hit by unexpected natural disasters or changes in export policies It will have a significant and comprehensive impact on the global and importing countries' food prices through the "rotation effect" among varieties, exchange rates and expected factors.

Recently, corn, soybean and soybean meal futures prices have risen 28% in the past month due to concerns that the continued hot and dry weather in the Midwest will reduce the harvest. The recent soybean contract hit an all-time high on July 9. On July 11, the monthly report of supply and demand of agricultural products of the United States Department of Agriculture (USDA) sharply reduced the yield per unit area of soybean and corn and the stock at the end of the new cropping period in the United States, which was lower than the previous market expectations, reflecting the impact of drought on crop growth in the previous producing areas. The short-term focus of the market focused on the expected yield reduction caused by disasters, resulting in strong food prices.

The frequent occurrence of disastrous weather in Russia and China has led to stronger market expectations of future production cuts.

The probability of short-term hype is high:

We believe that the expectation of the market for the reduction of grain production in the future leads to the judgment that domestic grain prices will rise strongly in the future, and the rise in the share prices of agricultural listed companies is a high probability of short-term speculation.