Futures Daily
Affected by poor demand, the price of eggs was in a downturn in December last year, and the spot price hit the largest drop since 2022, as high as 24.46%. After entering January this year,eggFutures and spot prices showed a slight increase. The author believes that as the Spring Festival is approaching and terminal stocking is coming to an end, spot egg prices will enter a downward trend again after the Spring Festival.
Significant seasonality
Since September 2022, egg prices have reached a yearly high, and breeding profits have increased to a certain extent, which has driven the price and sales of chicken chicks to pick up. The sales data of chicken chicks hit a peak in the second half of the year in October last year. Judging from the production capacity in the first quarter of this year, the new laying hens in January are mainly chicks that will be supplemented around September 2022. The volume of chicken supplements in September increased by 4.26% month-on-month, and the volume of chicken supplements in October continued to increase month-on-month 6.51%. Therefore, the number of laying hens will increase slightly in the first quarter of this year. Overall, there is still a certain pressure on the inventory. As for chickens, at present, laying hens over 450 days old in the main production areas account for about 9.69% of the overall stock of laying hens, a decrease of 0.39 percentage points from the previous month, and a slight decrease in old chickens of the right age. Although there was a certain number of chickens in January, due to the holiday of slaughterhouses during the Spring Festival, the overall number of old chickens slaughtered may not be as good as expected. In addition, February and March are also off-seasons for chickens, and the overall increase in stocks is greater than the number of slaughtered. From the perspective of inventory, the supply will increase in the first quarter. In addition, in terms of inventory, in the middle and late December of last year, the purchase volume of consumers and downstream enterprises in various markets decreased, and the sales speed of dealers was slow. In January, the overall inventory pressure was slightly greater.
Egg prices have a strong seasonal pattern. The Spring Festival is the traditional peak season for the egg market. After the Spring Festival, the demand for eggs will be released in advance, and the demand may decrease. According to historical data statistics, in recent years, the sales volume in January has decreased by 0.30%-16.90%. And January this year is no exception. In January, due to the holiday of enterprises and the holiday of the wholesale market during the Spring Festival, the demand for eggs may continue to decrease. After the Spring Festival, egg consumption will enter the off-season, and the terminal will mainly digest the previous inventory. The egg price has a certain upward momentum in early January, but it is still a little weak, and the overall stocking is still insufficient. After experiencing a slight rebound, spot egg prices will once again enter a downward trend after the Spring Festival. Therefore, with the Spring Festival as the boundary, the demand for eggs in January may show a trend of first increasing and then decreasing.
Bottom still firm for egg prices
2022corn、soybean mealOperating at a high level, the entire laying hen feed cost is at a high level in recent years. According to the latest data, the average cost of a single catty of feed is around 3.81 yuan per catty, and the overall break-even point for egg prices in 2022 is around 4.2 yuan per catty.Looking forward to 2023, it will be more difficult for the overall feed cost to drop sharply. In 2023, the globalsoybeanThere is an expectation of production expansion. If the weather is not unexpected, the expansion of soybean meal production will be greater than the growth rate of demand. The high level of soybean meal may come to an end. In 2023, the logic of the hard gap between supply and demand in the corn market will continue to exist, so there is strong support below the price, and there is a high probability of maintaining a high-level oscillation pattern. Overall, the feed cost may be eased compared to 2022, but the relief is limited, so the overall feed cost is still supported.
On the whole, from the perspective of the supply side, there will be an increase in the first quarter, while from the perspective of the demand side, the egg price has risen to a certain extent in the first half of January, but it is still a little weak, and the overall stocking is still insufficient year-on-year. During the Spring Festival, due to the holiday of enterprises and the holiday of the wholesale market during the Spring Festival, the demand for eggs may continue to decrease. After the Spring Festival, egg consumption will enter the off-season. The terminal will mainly digest the previous inventory, and the spot egg price will fall again after the Spring Festival. aisle. In addition, the feed cost is still a relative support point for egg prices. It is expected that the 2305 contract will be treated with a bearish mindset after the Spring Festival. However, the feed cost will still limit the sharp drop in egg prices. It is expected that there will still be some support around 4100-4200/500 kg.(The author’s futures investment consulting practice certificate number Z0016336)
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