Egg Weekly: Off-season not so slow! Another strong week!
Domestic Egg Market Analysis
1.1 Egg Market Price Analysis
This week, the domestic egg market continued its strong performance, with prices rising. As of Thursday, the average price of red eggs was 4.67 yuan/jin, and the average price of pink eggs was 4.89 yuan/jin, a price difference of 0.22 yuan/jin, an increase of 0.45 yuan/jin compared to last Thursday. Tight supply remained the main driver of this week's market. High temperatures led to a decline in egg production, passively reducing fresh egg output, while inventories in production areas and distribution channels remained at extremely low levels.
Positive changes in demand also contributed to the upward price momentum. As the plum rain season ended in the south, egg storage conditions improved, and traders' restocking demand was concentrated. More importantly, food processing companies and cold storage traders began pre-holiday stockpiling for the Mid-Autumn Festival, resulting in strong bullish sentiment in the market. Prices adjusted at high levels towards the end of the week, but the extremely low inventory remained the dominant theme throughout the market.
Production Area Market: On Thursday, the average price of eggs in major production areas was 4.7 yuan/jin, an increase of 0.24 yuan/jin compared to last Thursday.
Sales Market: On Thursday, the average price of eggs in major sales areas was 4.67 yuan/jin, an increase of 0.15 yuan/jin compared to last Thursday.
1.2 Egg Market Price Trend Chart
1.3 Comparison of Domestic Egg Regional Market Prices This Week
Analysis of Laying Hen Inventory and Slaughter
2.1 Inventory Analysis
This week, the egg market inventory decreased slightly but showed a marginal increase. The current overall inventory is relatively low, which is the core fundamental support for the current strong egg prices. However, it cannot be ignored that the inventory pattern is undergoing subtle changes. New production capacity mainly consists of chicks added in March, meaning that the supply of small-sized eggs will gradually increase. However, the current widespread high temperatures have suppressed the egg production rate of laying hens, offsetting to some extent the production pressure brought by the slight increase in inventory.
2.2 Slaughter Analysis
This week, the culling volume of eggs continued to operate at a low level. With current strong egg prices and considerable profits for farmers, there are high expectations for the upcoming Mid-Autumn Festival market, leading to a general decision to postpone the culling of older hens to lock in future profits. This pattern of increased new egg production and delayed culling of older hens creates a net offset between new and delayed capacity, further reinforcing market expectations of tight supply.
Egg Demand Analysis
This week, egg market demand is expected to strengthen. However, actual end-consumer demand is currently in the traditional summer off-season. High temperatures have suppressed appetites, leading to a preference for lighter diets and a contraction in basic egg demand. The core driver of this week's price increase is the advance stockpiling demand from downstream industries. Furthermore, extremely low inventory levels have amplified any fluctuations in demand, allowing the market to maintain a relatively strong performance despite weak end-consumer demand.
Egg Market Outlook
From the supply side, high temperatures are suppressing egg production in the short term, and low inventory levels offer virtually no buffer, supporting short-term high-level price adjustments. However, medium-term supply pressure is accumulating, with a month-on-month increase in small-sized egg supply and limited slaughterhouse purchases, potentially suppressing long-term prices.
From the demand side, we are currently in a transitional period from the off-season to the peak season. Current end-user consumption remains suppressed by high temperatures. While demand this week has been largely cautious, a peak season trend is anticipated, with expectations of a holiday effect during the upcoming Mid-Autumn Festival and National Day holidays.
Overall, the egg market is expected to experience slight fluctuations next week, with red and pink varieties showing different performance. The adjustment range is expected to be around 0.15 yuan/jin, with the average price in major producing areas at 4.55-4.7 yuan/jin.
