China Times (www.).chinatimes.net.CN) reporter Ye Qing reports from Beijing.
Recently, the egg spot **continued**. Taking the main producing area of Hebei as an example, the egg price in Handan, Hebei Province increased from 4 on December 547 yuan jin slipped to 3 on January 891 yuan catty, a cumulative decrease of 13%. Compared with 2022, the decline rate is low, and the decline rate is the same as that of the same period in 2021. Mr. Shang Ning, an egg ** in Hebei, said in an interview with a reporter from the China Times.
Affected by the egg spot***, from November 29, 2023 to January 8, 2024, the main contract of egg ** fell by 9%. Compared with the spot decline of eggs, the decline is less than the spot decline. As of January 8**, the main 2402 contract of eggs fell by 187%, reported at 3465 yuan 500 kg, transaction 25.8 billion yuan. Industry insiders said that the price of eggs is related to the excessive number of eggs in recent times.
In the fourth quarter of last year, the supply of eggs exceeded demand
In 2023, the egg ** as a whole showed a trend of high and low, and the egg price ran at a high level before the third quarter, and the high point of the peak season reached 5About 5 yuan catty, at a high level in recent years, but after the National Day fell rapidly, and the off-season decline was greater than in previous years, mainly because the food sector fell heavily at the beginning of the fourth quarter, and the production capacity of laying hens began to rise cyclically, driving the increase in egg supply at the end of the year. Song Congzhi, a mid-term analyst at Founder, said in an interview with a reporter from the China Times.
Screenshot**: Breck Agricultural Data Terminal).
Lin Guofa, director of agricultural big data research at Breck, also told the China Times that since the Mid-Autumn Festival in 2023, the egg spot has been declining, and there has been a small amount during the period, but the amplitude and duration are shorter. At the beginning of September 2023, the eggs appeared**59 yuan kg, as of January 8, 2024, the national egg producing areas** fell back to 42 yuan kg, and there is a further ** trend.
At the same time, the reporter found that on January 8, the egg 2403 contract increased its position and fell, and the ** price was reported at 3399 yuan 500 kg, a decrease of 210%。Recently, eggs have continued to hit a low level, which has a greater correlation with egg spot prices, and at the same time, it is also closely related to the market's pessimistic expectations for the market outlook. It is understood that eggs are not related to the low enthusiasm of the terminal link, and at the same time, the orders of food companies are limited, the purchase volume is low, and the links are mainly to clean up the inventory, the market circulation is slow, and the growth trend of the inventory has not changed, and the egg price is under pressure.
Culling chickens is still the most critical factor affecting the short-term rhythm. According to the survey feedback, this year's consumption is not good, and most live poultry slaughterhouses have high inventory, resulting in a passive slowdown in the pace of old chickens. In addition, many farmers still have expectations for the egg price before the year, therefore, the old chicken is eliminated before the festival or difficult to release, and the follow-up attention to the rhythm of chicken shopping around March. CITIC analyst Cheng also said in an interview with a reporter from the China Times.
The egg production rate recovered to 91%.
Looking back on the development of the industrial chain, from the end of 2018 to 2019, the egg and poultry breeding industry (broilers and laying hens) experienced a wave of capacity expansion, which led to a deep loss of poultry in 2020. Laying hens continued to lose money in 2020 until 2021, when breeding profits began to appear, while continuous losses for white-feathered broilers continued until the second half of 2022. Lin Guofa said.
At the same time, Lin Guofa said that white-feathered broilers are also facing the contradictions of avian influenza in some foreign introduction areas, restricting the introduction, etc., in this context, the broiler seed source is tight, and a large number of laying hens have switched to 817 broiler miscellaneous chickens (seedlings), which has reduced the production capacity of commercial eggs for laying hens to a certain extent, and the breeding end has been facing high feed raw material cost pressure from 2021 to the first half of 2023.
It is understood that from the end of 2020 to 2022, corn ** is at a historical high, and then from the end of 2021 to the third quarter of 2023, soybean meal ** grid, under this factor, the high cost of egg production superimposed on some laying hens to produce meat miscellaneous 817, egg ** has maintained a high level. It is precisely because of the overall good profit of laying hen breeding that this factor promotes the expansion of laying hen breeding capacity.
Since 2023, domestic white-feathered broiler breeds have been released one after another, and the production capacity of white-feathered broilers has been better released in the third quarter, reducing the demand for seedlings of meat miscellaneous 817, and some laying hens have returned to the production of commercial eggs, and from September to October, laying hens have been eliminated while a large number of new chickens have been filled, and the production capacity of laying hens has been expanded, and the demand for laying hens to switch to meat miscellaneous 817 has decreased. Lin Guofa said.
In addition, CITIC analyst Cheng also said that from the perspective of spot fundamentals, the continuation of spot egg prices is also related to the continuous decline in costs. According to the current feed raw materials (corn, soybean meal), the feed cost of a single catty of eggs is estimated to be about 312 yuan catty, down 0 from mid to late October3 yuan catty, a cumulative decrease of 8%. Based on this, the valuation center of spot egg prices continues to decline.
It is worth noting that in terms of egg production rate, the winter temperature is low, and the egg production rate has rebounded to a high level. According to Zhuochuang Consulting, the peak egg production rate has been reduced from a low of 88 at the end of July5%, back to 9186%。
In terms of inventory, due to the higher profit of layer breeding in 2023, the sentiment of driving the supplement is more positive, and the empty rate of laying hens continues to decline, as of the end of 2023, according to Zhuochuang Consulting, the empty rate of laying hens is only 896%, +06%, a year-on-year change of -26%. Cheng also said.
Recently, the agricultural product index has shown a systematic decline, on the one hand, the egg ** is dragged down by the upstream feed end, on the other hand, affected by the spot market, the consumption after the New Year's Day has dropped significantly in the short term, the Spring Festival stocking has not yet begun, and the center of gravity of egg prices has moved significantly. However, ** The overall market trading is relatively active, with a year-on-year increase of about 20%. Song Congzhi said.
The center of gravity of the egg continues to move downward
At present, the market has sufficient eggs, and the number of small-sized eggs has increased significantly, confirming the increase in new laying hens. Therefore, the supply of eggs was relatively abundant before the year. The first link has become more cautious after the loss, the current overall situation is in a wait-and-see state, the intermediate link inventory has a small accumulation but the absolute amount is not high, the overall industry inventory is about 1 day. Song Congzhi said.
An egg businessman in central China told reporters that the recent egg sales are not high, and now the market is relatively slow, the overall sales speed of eggs is not fast, the terminal is mainly based on rigid procurement, the market digestion situation is not ideal, and the downstream is mainly based on on-demand procurement, and the future sales force is insufficient. It is expected that at least in the second half of the year, as the Spring Festival approaches, eggs may have some.
In terms of production and stock, the number of new laying hens continues to increase. According to the estimation of the life cycle of laying hens, the new peak inventory of laying hens in January 2024 is the amount of seedlings replenished from July to August 2023, and the seedlings replenished at this time showed a month-on-month increase trend. The amount of supplementary columns has picked up from a low level, and it is expected that the new laying hen inventory will gradually increase in the near future. According to the data of Zhuochuang Consulting, in December, China's monthly inventory of laying hens was 12100 million, a change of 025%, a year-on-year change of 263%。Cheng also said.
At the same time, the agricultural product index continued to fall after the New Year's Day, and the index of egg spot **, the center of gravity of the long-month valuation moved significantly downward. In terms of egg fundamentals, the current inventory of laying hens continued to rise slightly month-on-month, and the elimination of old chickens increased, but the sales of chicks continued to rise from July to August, and it is expected that the overall supply of eggs will increase unabated before the Spring Festival in 2024. Song Congzhi said.
In addition, Song Congzhi said that the long-term feed raw materials fell month-on-month, which may drag down the center of gravity of egg prices to a certain extent. The current futures price maintains a high discount to the spot, which reflects the expectation of a rebound in production capacity to a greater extent. However, due to the gradual recovery of supply throughout the year, the trend of egg price gravity continuing to move downward may have been formed, and the downside risk of the layer industry cycle this year has increased.
Based on the analysis of the above fundamentals, the center of gravity is gradually rising, and the cost center continues to move downward. If the stocking demand for eggs before the holiday is large, it is not ruled out that there will be a small **, but even if it is, the strength is relatively limited. In terms of strategy, it is recommended to pay attention to the entry opportunities of high-altitude near-month contracts JD2402 and JD2403, with a lower limit range of 3300-3400. Cheng also said.
Editor-in-charge: Shuai Kecong Editor-in-chief: Xia Shencha.