How do experts make egg futures?
Egg futures is the first animal husbandry futures variety and fresh agricultural products in China. It was approved by China Securities Regulatory Commission on 20 13 and listed on Dalian Commodity Exchange. The price of eggs fluctuates greatly, mainly because of the elasticity of demand. When the price of eggs fluctuates violently, many enterprises in the egg industry chain have realized the importance of hedging, for example.
The spot price of eggs in February last year was 3 yuan, and the futures contract in May was 3.8 yuan. A found that the whole market was not good, the stock of laying hens remained high, and consumption in the egg market would decrease after the Spring Festival in February, so the price in May might not reach the futures market price in 3.8 yuan.
A, according to my egg production in May, there are about 20 tons of eggs, and I short 4 lots (5 tons in one hand) of eggs in the futures market at the price of 3.8 yuan to hedge the May contract.
The whole market outlook is in line with A's expectations. By May, the spot price dropped to 2 yuan per catty, so A had to sell eggs at a loss in the market, with a loss of 7 cents per catty and a loss of 28,000 tons in May.