.jpg)
Since the egg contracts, China’s first fresh livestock futures product, were successfully listed on November 8, 2013, the egg futures have seen brisk trading in the first month with steady market operation, preliminarily showing the functions of price discovery and hedging against risks and presenting the market with a satisfactory performance.
According to statistics, as of December 6, in a total of 21 trading days, the eggs futures recorded a total transaction of 1.2999 million contracts (unilateral, the same below) for all contract months, with a total turnover of RMB 53.365 billion, an average daily trading volume of 61,900 contracts, an average daily turnover of RMB 2.541 billion and an average daily open interest of 40,000 contracts. On December 6, the transaction and the open interest were 48,400 and 45,000 contracts respectively. Since the listing, the 1405 Contract has been the dominant contract, recording the transaction and the open interest at 46,500 and 30,000 contracts respectively on the 6th.
With regard to the recent price changes of the egg futures, Zhan Xiao, a senior analyst with Xinhu Futures, said that the price fluctuations of the egg futures have seen a solid basis of the fundamentals and reflected the market expectations for the spot egg prices, with the egg futures’ function of price discovery initially manifested.
According to Li Dingwei, manager of poultry and egg division of China-America Commodity Data Analytics, Inc., the futures market has the function of price discovery, the futures prices reflect the expectations for the future and compared with the spot market, the futures market features more rapid response to information. The price changes in the first month of the listing of the egg futures have reflected the above-mentioned characteristic of the futures prices. He believed that on the whole, the egg futures ran steadily in the first month of listing with high degree of participation of all kinds of investors as well as the trend relatively consistent with the spot fundamentals. The spreads between the contracts of different months have been at a reasonable level and the brief deviations in the process of price changing have been corrected timely by the market.
Market researchers pointed out that the successful listing and steady operation of the egg futures, China's first fresh livestock futures product, is of great significance in itself. As the pathfinder of the livestock futures, its steady trading in the first listing month was a good start for the future development of the livestock futures. In the course of listing and operation of the egg futures, in accordance with the requirements of the China Securities Regulatory Commission (CSRC) for "High Standard and Steady Start", Dalian Commodity Exchange (DCE) has imposed strict management and risk control while neglecting the pursuit of trading volume, having ensured the steady operation of the egg futures after the listing.
