Market participants: flat consumption or stage suppression of egg prices

After experiencing a higher oscillation in October, egg spot prices have been stable in recent days, and futures oscillations have closed slightly higher
.
As of November 2, the main egg 2301 contract closed at 4329 yuan/500kg, up 0.
02%.

Market sources said that market demand is flat or suppresses egg prices
in stages.
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The Qisheng futures research team told the Futures Daily reporter that although October is the off-season for egg demand in the second half of the year from a seasonal point of view, due to local epidemic factors in China, the phenomenon of hoarding and rushing to buy has appeared, resulting in a phenomenon that the off-season is not light, and the price has also changed the sluggish state of previous years, oscillating upward and hitting a new high
in the year.
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"In addition to demand, there are three main reasons for the continued rise in egg spot prices in October this year: First, the production capacity of laying hens themselves is still not high, due to the epidemic and cost and other issues, the high profits in the early stage failed to promote the rapid increase in laying hen production capacity, and the concentrated elimination of old chickens before the National Day was superimposed, so the overall supply of eggs in October was not loose; Second, the cost of breeding pushes up the price center of eggs, the cycle of laying hen breeding is short, extremely sensitive to cost, since September, soybean meal prices have driven the cost of laying hen breeding to rise again, according to incomplete estimates, the cost of egg production in large-scale enterprises is close to 4.
3 yuan / jin, so egg prices are rising; Third, the rise in animal protein prices is favorable to egg prices, meat and poultry, aquatic products and other prices are currently at the same historical high, egg prices run at a high level due to plate resonance factors
.
Founder medium-term futures egg analyst Song Congzhi said
.
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In fact, the supply of eggs is mainly determined by the number of laying hens in the laying hen inventory, and the number of laying hens in the laying hen inventory is mainly affected
by the number of new laying hens and the number of culled chickens.
According to the analysis of Wei Xiu, egg analyst of Huishang Futures, from the perspective of new production capacity, the newly opened laying hens in November are mainly chickens that are restocked around July 2022, when the temperature is high, it is difficult to brood, and the amount of seedlings on breeding is not large, according to the sample data, the amount of chicken seedlings in July decreased by 2.
89% month-on-month, so the new production capacity of laying hens in November will be reduced
.
In terms of eliminating chickens, as egg prices remain high after the Mid-Autumn Festival and breeding benefits are good, the breeding plan will delay the elimination of large-day-old laying hens until before the Spring Festival, and it is expected that the number of chickens eliminated in November may still be low
.
However, the number of culled chickens may be greater than the number of newly opened laying hens, and the number of laying hens in November may be slightly reduced, and the supply of eggs may still be tight, which has a positive effect
on egg prices.
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"Driven by Double 11, supermarkets and e-commerce may have a wave of promotional activities, and the demand is expected to increase
.
In addition, in November, the terminal market has no other holiday positive factors, the current egg price is already at a historical high, will have a certain restraining effect on consumption, downstream dealers in order to avoid risks, procurement mentality is more cautious, on demand small batch purchase
.
Wei Xiu said
.
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Looking forward to the future market, the Qisheng Futures research team believes that the overall supply of eggs from November to December is in a tight state, and the inventory of production and circulation links is still maintained at a normal level.

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Song Congzhi said that short-term commodities showed a systematic decline, the sentiment of the feed breeding sector weakened, and the domestic fresh products sector as a whole fell back, dragging down the egg index after breaking the festival
.
Operationally, the current valuation of egg 2301 is low, and the high cost of spot and breeding may limit its decline, and the medium and long-term reference layer production capacity cycle is on the high layout of 2305 shorts
.
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In Wei Xiu's view, it is difficult to improve the situation of tight egg supply, feed costs are still at a high level, coupled with the temperature drop, the storage time of eggs is extended, the breeding price is low and reluctant to sell, the mood of hope for rise is strong, and the room for egg prices to fall may be limited
.
However, the terminal market is strongly resistant to high-priced eggs, the transmission trade link is afraid of heights, the recent market demand is flat, or the egg price
is suppressed in stages.
Under the market supply and demand game, egg prices are expected to remain high and oscillating in November, and the room for rise and fall may be limited
.
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