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Core view
After the large number of pre-traders smashed the goods, the egg stocks in the production areas and sales areas increased sharply in the short-term, the market supply pressure appeared, the sales in the sales area began to stagnate, and the farmers and traders began to compete to sell at a reduced price, which in turn led to the price of eggs. Drastically fell.
Along with the rainy season in mid-July, it affects the storage and transportation of eggs, and the summer vacation of large and medium-sized colleges and universities. The sales of spot eggs that have experienced skyrocketing are not smooth, and there is a downward adjustment, which is the performance of seasonal fluctuations.
Laying hens reproduce losses, and short-term egg futures are in a downward trend. More is the market mentality and trend factors. In addition, we need to pay attention to the Mid-Autumn Festival of eggs, should not be excessively bearish, is expected to enter the end of July, the spot price of eggs is expected to gradually stabilize, in the medium term, the egg 1709 is still expected to pick 4200-4500 yuan / 500KG line.
Text | Yan Datou Hedge Research Specials
Edit | Hedge research and reprint, please indicate the source
In June, the spot price rose rapidly, and the egg futures triumphed. The main contract JD1709 rose from the previous low of 3,367 yuan / 500 kilograms to a high of 4,075 yuan / 500 kilograms, an increase of 21%.
Today, JD1708, JD1709, JD1710 and other near-month contracts all fell strongly, and JD1711 once fell. As of the close, JD1708 contract closed at 3249 yuan / 500 kg, a sharp drop of 5%; JD1709 contract closed at 3797 yuan / 500 kg, a sharp drop of 4.98%; JD1710 contract closed at 3632 yuan / 500 kg, a sharp drop of 5%; JD1711 contract It closed at 3,579 yuan / 500 kg, a sharp drop of 4.99%.
On this day, mankind finally remembered the fear of being dominated by the skyrocketing eggs.
Traders smash goods, the supply pressure of the spot market appears
According to statistics from Zhihua, on June 1, the purchase price of eggs in Zhengzhou, Henan Province was 1.91 yuan / kg; on June 14, the data became 2.42 yuan / kg; on June 20, the price rose to 2.88 yuan / kg; After climbing to a high of 3.56 yuan / kg or even 4 yuan / kg on the 22nd, the mainstream egg sales price fell on June 30 and stabilized at 2.33 yuan / kg.
The spot of eggs experienced a big ups and downs in June. The price of eggs in the month rose by as much as 68%. The price fluctuations caused by large fluctuations caused the industry to be in turmoil. At the beginning of June, due to the increase in the number of chickens eliminated and the hot weather suppressing egg production, the prices in the production areas were higher, and the national average price exceeded 3 yuan per catty. Subsequently, Guangdong and other sales areas began to slow down, the sales area prices fell, driving the spot price of the production area fell.
According to statistics, as of June 30, the egg purchase price in Hubei fell by 17%, and the Zhengzhou area in Henan fell by as much as 35%. The insiders said that it was precisely after the previous traders dumped a large number of goods, the egg stocks in the production areas and sales areas increased sharply in the short term, the market supply pressure appeared, the sales in the sales area began to stagnate, and the farmers and traders began to compete for price sales. It also led to a sharp drop in egg prices.
How did the egg price rise in June?
It is understood that June itself is a month of tight balance of the egg market, the spot price of traditional eggs began to rise from the summer solstice. Since June, on the one hand, the hot weather in summer has led to a decline in egg production rate; on the other hand, the stock market in the egg market has decreased significantly in June. Due to the hot weather, the storage time of fresh eggs dropped from more than one month to about 20 days, and the overall stock of eggs in the market declined.
Therefore, the sharp rise in the egg market price in June has its inherent logic, and it is also the market reaction of the market structural supply and demand imbalance in the short term. Since June, due to the large fluctuations in the spot price of eggs, the price of the futures market has also experienced large fluctuations. The owner of a farm in Shanxi introduced the fluctuation of the egg price. On the one hand, the spot in the production area rose first, driving the spot and futures of the sales area to rise.
Spot stocks rose the most, followed by futures contracts in recent months, and futures far-month contracts rose the least. In fact, it can be seen from the price of eggs in various places that the price of this round of eggs began in North China, namely Shandong and Hebei. It is understood that before the price rose sharply on June 6, Shandong and Henan stocks rose first, and then the spot and futures of the sales area rose. According to the Shanxi Jinlong survey, the average spot price in Henan rose from 1.94 yuan/kg on the 6th to 3.4 yuan/kg on the 22nd, an increase of 75%.
In the same period, the futures contract 1707 contract rose from 2,543 yuan / 500 kg (settlement price, the same below) on June 6 to 3,594 yuan / 500 kg on June 22, an increase of 41%. At the same time, the egg futures 1708 contract rose from 3103 yuan / 500 kg on June 6 to 3833 yuan / 500 kg on June 22, an increase of only 24%. During the same period, the futures 1709 contract rose by 12%.
With the continuous increase in egg prices, egg consumption in South China and other places continued to decline, especially in Guangdong and other sales areas began to slow down, and the sales area prices began to fall, driving the spot and futures of the production area began to fall. The data showed that the spot fell the most, the futures market was the second-month contract, and the futures far-month contract fell the least. According to statistics from Zhihua Data, as of June 30, the price of eggs purchased in Lishui, Hubei fell by 17%, and the price of eggs in Zhengzhou, Henan fell by 35%.
Due to the near delivery, the egg 1707 contract and the spot price of Hubei Lishui fell by the same amount, at 17%, and the eggs 1708 and 1709 contracts fell by only 8% and 1% respectively. In the process of rising or falling, the spot price fluctuation of eggs is higher than the futures price. The futures contract volatility is higher than that of the far-month contract, and the decline is gradually narrowing. From the perspective of price discovery, the futures market transactions are more rational and not There are situations that lead to spot volatility.
Scenario analysis: Is there still a drop in egg prices in July?
In July, due to the hot weather, the storage time of fresh eggs dropped from more than one month to about 20 days, and the overall stock of eggs in the market declined. It is understood that June itself is a month of tight balance of the egg market, the spot price of traditional eggs began to rise from the summer solstice. Since June, on the one hand, the hot weather in summer has led to a decline in egg production rate; on the other hand, the stock market in the egg market has decreased significantly in June.
Due to the hot weather, the storage time of fresh eggs dropped from more than one month to about 20 days, and the overall stock of eggs in the market declined. Therefore, the sharp rise in the price of eggs in June has its inherent logic, and it is also the market reaction of the structural imbalance between supply and demand in the short term. According to traders in Lishui County, Wuhan, since June, due to the massive elimination of laying hens in the previous period, the supply of eggs has suddenly been short, and traders and farmers have begun to hoard eggs.
At the same time, farmers everywhere are also looking at the price increase and want to spend another day to sell. The production area does not sell, the sales area is quail, resulting in a serious short-term supply and demand imbalance in the egg market. After a large number of traders dumped goods, the egg stocks in the production areas and sales areas increased sharply in the short-term, the market supply pressure appeared, the sales in the sales area began to stagnate, and the farmers and traders began to compete for price-selling sales, which led to a sharp drop in egg prices.
However, with the mid-July season entering the rainy season, affecting the storage and transportation of eggs, and the summer vacation of large and medium-sized colleges and universities, the sales of spot eggs experiencing skyrocketing are not smooth, and adjustments are falling, which is the performance of seasonal fluctuations. According to Wang Chengqiang, an analyst of New Era Futures, based on the above considerations, we made a clear reminder in late June that the risk of a fall after the surge may be faced in the next two to three weeks.
In addition, taking into account the production cycle of laying hens, the number of laying hens will continue to decline in the next two months. It is expected that the spot price drop of the plunging will come to an end and will enter the stage of consolidation, and the plum rain will enter the sky, and the price will be renewed. Opened a sharp rise in the second half of the year. At the same time, the market has determined that the number of laying hens is too small, and the pressure on the supply of eggs in the later period is reduced.
Breck. 000061 agricultural, forestry, research director at the country attending stocks also said that the current decline in the market for just over an excessive rise in reaction early 6-6 end, and overlap the off-season demand, causing prices fell after the early traders and stock breeding The family’s panic sells. Eggs have plummeted, and the number of laying hens has decreased. At present, the continuous decline of eggs has not been a purely fundamental problem, and it has been mixed with more market panic mentality.
Laying hens reproduce losses, and short-term egg futures are in a downward trend. More is the market mentality and trend factors. In addition, we need to pay attention to the Mid-Autumn Festival of eggs, should not be excessively bearish, is expected to enter the end of July, the spot price of eggs is expected to gradually stabilize, in the medium term, the egg 1709 is still expected to pick 4200-4500 yuan / 500KG line.
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