Supply Side - The number of laying hens in production has shown an upward trend, with approximately 1.329 billion hens as of the end of April, up from 1.318 billion at the end of March and 1.306 billion at the end of February, reflecting a month-on-month increase of 0.8% and a year-on-year increase of 7.2% from 1.24 billion last year [1] - Due to favorable breeding profits starting in May 2024, the replenishment enthusiasm in the second half of the year has improved and is expected to continue [1] - Sample enterprise data suggests a slight increase in stock levels is anticipated in Q2 2024, with this trend likely to persist at least until the end of Q2 [1] Demand Side - Weekly chicken egg sales for the four weeks ending May 1 were approximately 8,772 tons, consistent with March figures and up from 6,942 tons in February, while April sales were around 7,674 tons [1] - April sales showed both month-on-month and year-on-year increases, with good sales post-Qingming Festival, although some demand may be attributed to low-price stockpiling that has not yet been fully consumed at the terminal [1] - The inter-regional movement of people increased by about 5.5% compared to last year during the May Day holiday, which is beneficial for holiday consumption demand for eggs [1] Market Outlook - The current demand season is not robust, with excess inventory needing to be digested, leading to a potentially weak market in May, with attention on the Dragon Boat Festival stocking situation at the end of the month [1] - In the futures market, due to weak spot prices and low basis for the June contract, there may be room for price declines, with a rebound contingent on continued increases in chicken culling [1] - Short-term outlook is bearish, with futures traders advised to monitor mid-month spot stability and consider bearish operations if demand remains lukewarm, while looking for opportunities in the August and September contracts post-monsoon season [1] Key Variables - Important variables to monitor include the demand situation for the Dragon Boat Festival, culling intentions, and feed costs [1]

Supply Side - The number of laying hens in production has shown an upward trend, with a monthly stock of approximately 1.329 billion as of the end of April, up from 1.318 billion at the end of March and 1.306 billion at the end of February, reflecting a month-on-month increase of 0.8% and a year-on-year increase of 7.2% compared to 1.24 billion last year [1] - Due to favorable breeding profits starting from May 2024, the replenishment enthusiasm in the second half of 2024 is expected to recover and continue. Some sample enterprises suggest a slight increase in stock in the second quarter of this year, with current breeding profits indicating this trend may persist at least until the end of the second quarter [1] Demand Side - Weekly chicken egg sales for the four weeks leading up to May 1 were approximately 8,772 tons, consistent with March figures and up from 6,942 tons in February, while April sales were around 7,674 tons. April sales showed an increase both month-on-month and year-on-year, with good sales post-Qingming Festival, although some demand may be attributed to low-price stockpiling that has not yet been fully consumed at the terminal level [1] - From April 30 to May 3, the nationwide inter-regional mobility increased by about 5.5% year-on-year, compared to a 2.1% increase during the same five days last year, which is beneficial for holiday consumption demand for eggs [1] Market Outlook - The current peak season for spot demand is not robust, with excess inventory needing to be digested. A decline in demand is anticipated, leading to a weaker market in May, with attention on the replenishment situation post-Duanwu Festival. The futures market may see price declines due to weak spot conditions and low basis for the June contract, with short-term bearish sentiment prevailing [1] - Strategies suggest that producers and spot traders should view May's spot prices as weak, while futures speculators may find the June futures overvalued. Monitoring mid-month spot stability is crucial, with a bearish approach recommended if conditions remain lukewarm. Opportunities for long positions may arise after the rainy season, particularly for the August and September contracts once valuations decrease [1] - Key variables to watch include Duanwu demand, culling intentions, and feed costs [1]

Core Viewpoint - The recent surge in egg futures prices is attributed to rising feed costs driven by trade issues and a subsequent increase in spot egg prices, which has provided support for futures contracts [2][3][4]. Group 1: Price Movements - From April 1 to April 16, egg futures prices increased by 7.4%, with the main contract reaching 3078 yuan per 500 kg, up 2.87% on April 16 [2][3]. - The average price of eggs in major production areas rose from 3.06 yuan per jin to approximately 3.4 yuan per jin since early April [3][4]. - The main contract's open interest reached 173,000 lots, the highest in three years, indicating intense market speculation [3]. Group 2: Supply and Demand Dynamics - Egg consumption demand has been consistently increasing, supported by a 4.6% year-on-year growth in retail sales, with restaurant income rising by 4.7% in the first quarter [5]. - Despite a 5.21% year-on-year decline in egg sales volume to 68,210 tons, significant increases were noted in major markets like Beijing and Guangdong, with Beijing's supply up 19.1% [5]. - The inventory levels of laying hens remain high, with 1.318 billion hens recorded in March, a 6.8% year-on-year increase, indicating a stable supply [6]. Group 3: Market Outlook - Analysts express caution regarding future price trends, emphasizing the need to monitor feed costs and the culling of laying hens, which could impact supply [7]. - Current egg prices are near the breakeven point for poultry farming businesses, suggesting that producers may not actively cull hens despite rising prices [7][9]. - The outlook for egg prices post-September appears weaker, with concerns about potential losses in the poultry industry by 2026, although optimism remains for 2025 [9].