The Stock Period Linkage of Jujubes Agricultural Product Price Transmission Attracts Attention

 The Stock Period Linkage of Jujubes Agricultural Product Price Transmission Attracts Attention

Divided into two markets, stock market and futures market, what is the internal relationship between jujube futures and this wave of thinking about you?

Jujube futures

I miss you so much

On April 30, 2019, jujube futures were officially listed on Zhengzhou Commodity Exchange. On the A-share market, I wish you were the only listed jujube company. On the new third board market, there are Kunlun jujube industry (837261), Jinrun jujube industry (837724), Tianshenghong (837399) and many other companies.

According to the issues related to the listing of jujube futures announced by Zheng Shang Institute, I would like to know that there are four companies and subsidiaries applying for the qualification of delivery warehouse, namely Xinjiang Baicao flavor Agricultural Science and Technology Development Co., Ltd., Xinjiang Singing Fruit Food Co., Ltd., Want You Healthy Food Co., Ltd., Cangzhou Want You Jujube Industry Co., Ltd.

After the jujube futures are listed, I wish your stock price will have a lot of connections with the futures trend. Except for the same frequency fluctuation on June 13, I really want your stock price to follow the upward trend of jujube futures as a whole in early May. On May 13, the main contract of jujube futures closed up and down, so I think your share price also closed up and down in the same day. According to the Longhu List, Huatai Securities Shenzhen Yitian Road Rongchao Business Center securities business department bought 5.9 million yuan on the 13th, while Guotai Junan Shanghai Jiangsu Road sold 3.95 million yuan, with obvious hot money.

Why can jujube futures influence miss you so much?

After the successful merger and acquisition of Hangzhou Holmes Food Co., Ltd. in 2016, I want to expand your main business from jujube products to nuts and other healthy snacks. However, as one of the main raw materials, the price and cost of jujube still have a close impact on the companys profitability. The listing of jujube futures is undoubtedly a good way to miss you.

On the eve of the date futures listing, I want you to announce on April 19, 2019 that you intend to carry out the date futures hedging business. You intend to use your own funds to invest in the date futures hedging business. The guarantee amount does not exceed 10% of the companys latest audited net asset value. The operation period is from 19 April 2019 to 30 April 2020.

I miss your chairman Shi Jubin said in an interview with the media that you used to purchase jujube raw materials in a centralized way. That is to say, from October to December of each year, the amount needed for the whole year is centralized purchasing, which is transported back from Xinjiang to Zhengzhou Headquarters for cold storage, but this kind of purchasing mode occupies a large amount of inventory and capital. After the date futures are listed, the company can realize precise purchasing according to the sales rhythm and market demand, combining futures and spot prices, which not only makes the operation more flexible, but also reduces the cost of capital and inventory occupation.

What is the linkage between the futures market and the stock market?

As the future expectation of spot price, the rise of commodity futures price will make people continuously improve the future performance expectation of related companies. From this logic, the commodity futures market and the stock market are closely related. However, the trend of commodity futures prices is not exactly the same as that of the stock market.

For example, in April 2018, due to the approaching peak season and international political and economic factors, coal and aluminium commodities, which had been falling continuously, began to rebound sharply. However, the prosperity of the futures market did not stimulate the related stocks in the industry to rise. On the contrary, the coal and aluminium sector generally fell, and the market reappeared the deviation of the stock period. Since then, in August 2018, when the A-share market was in a downturn as a whole, the prices of some black and chemical products in commodity futures markets have surged, and the main coke and coke contracts have continued to rise for more than one month.

There is no fixed model for the linkage between the stock market and the futures market, which exists in stages, and the logic will change with the market situation. Cheng Xiaoyong, director of Baocheng Futures Finance Research Institute, told reporters of Securities Times E Company that the correlation between stocks and futures may not be particularly obvious under the circumstances of high market prosperity. Because from the point of view of funds, the market situation is good, will present a situation of blooming in all directions, and in the near future, the rebound of the market index is not very strong, but some stocks perform better, the funds will follow up selectively, will be more affected by the commodity market.

In Cheng Xiaoyongs view, whether the stock market and the futures market can form a linkage is closely related to the factors that promote commodity prices.

Black products and other industrial products should pay attention to whether the driving factors of price rise are supply-side or demand-driven. If the price rises due to strong demand, then the possibility of the linkage between the stock market and the futures market is extremely great. But if it is driven by the supply side, there will not necessarily be a co-increase. He analyzed that the same period last year as this year, black price increases are affected by supply-side factors.

However, unlike industrial products, the recent rise in agricultural prices in the domestic futures market is closely related to the stock market.

In recent years, it is not only jujube commodities, but also the stock prices of Listed Companies in feed industry represented by new hope in China with the strength of soybean meal and rapeseed meal futures. According to Cheng Xiaoyongs analysis, the rising price of agricultural products in this round is mainly affected by the anticipated decrease in imports of agricultural products caused by Sino-US trade friction, and therefore is greatly affected by the supply side. If viewed from the demand side, African swine fever and other epidemics have a significant inhibitory effect on domestic demand for agricultural products. However, this increase in commodity prices in the agricultural sector can form a stock-period linkage, or because the price of agricultural products is more conductive downstream than that of industrial products.