The planting sector continued its aggressive rally today, with shares closing sharply higher as the market reacted to the escalating El Nino phenomenon. Shennong Seed Industry hit the 20% daily limit, while Xinsai Co, Longping High-Tech, Nongfa Seed Industry, Wanxiang Denong, Dunhuang Seed, Denghai Seed, and Jinjian Rice all locked in their daily limit-up moves. Dabelnong and Beidahuang also posted notable gains. The benchmark index tracked by the Nongmuyu ETF Huabao (159275), the CSI All-Share Agriculture, Animal Husbandry and Fishery Index, closed up 2.4%. As of August 31, 2026, the index's top-weighted constituents include Shennong Seed Industry at 1.25%, Xinsai Co at 0.44%, Nongfa Seed Industry at 0.97%, Wanxiang Denong at 0.43%, Dunhuang Seed at 0.68%, Denghai Seed at 0.74%, Jinjian Rice at 1.2%, Longping High-Tech at 2.07%, Beidahuang at 1.78%, and Dabelnong at 2.19%.

On the news front, the U.S. National Oceanic and Atmospheric Administration's Climate Prediction Center raised the probability of a "very strong El Nino" occurring between October and December to 95% in its August forecast. The event is expected to peak around November-December and could potentially become the strongest on record, with effects likely persisting into the spring and summer of 2027. The World Food Programme estimates that this El Nino could increase the number of people facing severe food insecurity in 45 key countries from approximately 225 million to 274 million by the end of 2027, adding at least 49 million people. Central America and Southern Africa are projected to be the most severely affected regions.

Guosen Securities noted that historically, super-strong El Nino events are often accompanied by higher risks of regional droughts, floods and high-temperature disasters. Southeast Asia and India typically see reduced rainfall, while the west coast of South America and the southern United States experience increased precipitation. China may face abnormal weather patterns such as "flooding in the south and drought in the north," posing potential threats to global agricultural production. Additionally, the ENSO cycle historically exhibits "quasi-periodic oscillation" characteristics, with La Nina typically following the conclusion of El Nino, which could continue to disrupt agricultural production.

Orient Securities highlighted that commodity price increases have already transmitted to the agricultural sector. From a fundamental perspective, the upward trend in grain prices is now well established, with positive fundamentals for crop planting and seed industries, making large-scale planting investment opportunities increasingly apparent. As expectations for El Nino intensity rise, price upside potential for tropical cash crops such as natural rubber, white sugar and palm oil is expected to open up.

From a valuation perspective, the agriculture, animal husbandry and fishery sector remains at relatively low levels, suggesting this could be an opportune time for positioning. Wind data shows that as of August 31's close, the price-to-book ratio of the CSI All-Share Agriculture, Animal Husbandry and Fishery Index stood at 2.39 times, placing it at the 18.43rd percentile over the past five years—a low level that highlights its medium-to-long-term allocation value.

Looking ahead, Huayuan Securities indicated that commodities such as palm oil, white sugar, cotton and rubber may face more significant production cut risks during El Nino years. The trend of rising crude oil prices is supporting the bottoming-out of agricultural product valuations through dual pathways of "cost push" and "demand resonance." The firm recommends focusing on commodities like white sugar, rubber and soybean meal that benefit from increased demand due to rising oil prices, as well as related targets, alongside leading seed companies that stand to profit from grain price recovery.

For a one-stop allocation across the entire agriculture, animal husbandry and fishery value chain, the Nongmuyu ETF Huabao (159275) deserves attention. According to China Securities Index Company statistics, this ETF passively tracks the CSI All-Share Agriculture, Animal Husbandry and Fishery Index, with weight stocks including leading pig farming companies and covering major sub-sectors such as feed, grain planting, and animal health products across the industry chain. Off-market investors can also participate through the linked fund (Class A: 013471, Class C: 013472). Investors should note that when subscribing or redeeming fund shares, the agent may charge a commission of no more than 0.5%, which includes fees collected by securities exchanges and registration institutions. Please refer to the fund's legal documents for specific fee details.

Institutional views referenced in this article are sourced from: Huayuan Securities August 25 agriculture, forestry, animal husbandry and fishery weekly report "Demand Marginal Recovery, Pig Prices Gradually Rising"; Orient Securities August 23, 2026 weekly report "Supply Disruption Expectations Intensify, Agricultural Products Trending Higher"; Guosen Securities August 31, 2026 "Agricultural Product Special Report: Current El Nino Strength May Set New Record High, Potentially Catalyzing a New Round of Agricultural Price Increases."

Risk disclosure: The Nongmuyu ETF Huabao passively tracks the CSI All-Share Agriculture, Animal Husbandry and Fishery Index, which has a base date of December 31, 2004 and was released on December 12, 2016. The index's constituent stocks are adjusted in accordance with its compilation rules, and historical back-tested performance does not indicate future index performance. The stocks mentioned in this article are solely for objective display as index constituents and do not constitute any stock recommendations, nor do they represent fund manager or fund investment directions. Any information appearing in this article (including but not limited to stocks, comments, forecasts, charts, indicators, theories, or any form of expression) is for reference only, and investors must bear responsibility for their own investment decisions. Furthermore, any views, analyses or forecasts in this article do not constitute investment advice of any form to readers, and the company is not liable for any direct or indirect losses arising from the use of this content. Investors should carefully read fund legal documents including the Fund Contract, Prospectus and Fund Product Summary to understand the fund's risk-return characteristics and select products that match their own risk tolerance. Past fund performance does not predict future results, and the performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. According to the fund manager's assessment, the Nongmuyu ETF Huabao carries a risk rating of R3—medium risk, suitable for balanced (C3) and above investors; suitability matching opinions should refer to the sales institution's guidance. Sales institutions (including the fund manager's direct sales and other channels) evaluate fund risk in accordance with relevant regulations; investors should promptly review the suitability opinions issued by the fund manager. Suitability opinions may differ across sales institutions, and their risk ratings shall not be lower than the fund manager's assessment. The risk-return characteristics and risk rating described in the fund contract may differ due to varying considerations. Investors should understand the fund's risk-return profile, carefully select fund products based on their own investment objectives, time horizons, experience and risk tolerance, and bear risks accordingly. Registration of the above fund with the China Securities Regulatory Commission does not imply substantive judgment or guarantee of its investment value, market prospects or returns. Fund investment requires caution.