At the beginning of last week, urea futures continued their upward trend, and as the price hit a new high, the policy bearish expectation made urea futures quickly reduce their positions after hitting a new high, causing the price to fall. Later in the week, with the pullback of the overall commodity futures market, the rumors of the bearish nature of the urea futures market further fermented, so that the urea futures market began to walk out of four negative lines in a row since last Tuesday. Last week, the urea futures 09 contract opened at 2068 yuan (ton price, the same below), the lowest price was 2068, the highest price was 2189 yuan, and finally closed at 2086 yuan, with the maximum fluctuation range of 121 yuan during the week. In terms of transactions, the trading volume of urea futures 09 contracts was 1.445 million contracts, an increase of 1.015 million contracts week-on-week, and the open interest was 237,000 contracts, an increase of 18,200 contracts week-on-week. Last week, the domestic urea market was mainly rising, and the later rise slowed down, and the main support of the market was still the stable raw material procurement of compound fertilizer plants, but as urea prices continued to rise, dealers were more cautious in preparing fertilizer. In terms of supply, the average daily output of domestic urea plants last week was 185,000 tons, a decrease of 2,000 tons from the previous month and an increase of 19,000 tons from the same period last year. As the domestic agricultural urea market is in a wide range of fertilizer off-season, only a small number of dealers have a little fertilizer. The demand for industrial urea market is stable, and compound fertilizer factories have a rigid demand for urea raw materials, which supports the current price. In the international market, the weak demand in the global urea market continued to put pressure on the market last week, although the market in Brazil and Southeast Asia increased slightly, but did not lead to an increase in trading volume. The pressure on the shipment of urea producers in Egypt continues to increase, and it is reported that the amount of urea for sale in May is still large. India's domestic urea stocks have exceeded 10 million tonnes, suggesting that India's announcement in June of a bid purchase for urea imports is less likely. The urea futures 09 contract came out of the long upper shadow yang line last week, and fell sharply after rushing higher, with heavy resistance above. In the case of firm and stable spot prices, the pessimistic expectations of urea futures are fully expressed. This is partly due to the decline in overall commodity market prices, but more due to investors' reflection of the deterioration in urea's future fundamentals. From a policy perspective, relevant associations and exchanges have expressed clear concerns about the rise in urea futures prices, and hope that urea futures price fluctuations will tend to be stable and reasonable. In addition, the relevant bearish policy rumors have also made the short funds gain some psychological comfort from it. On the other hand, from the historical year-on-year supply-demand value relationship, it is not difficult to conclude that shorting can obtain positive returns. In the later stage, if the spot price of urea falls, urea futures can maintain a simultaneous decline under a large basis; However, if the spot price of urea rises, it is difficult for urea futures not to rise in the context of such a large basis.
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Please indicate in the following format for reprinting: Source: Agricultural Resources Herald Author: Guo Qing Editor: Chen Ran Review: Wang Meihong Producer: Zheng Hongyan
