Urea futures plummeted, how to affect the spot market?

    Last week, urea futures UR2001 contract activity was low, with a daily turnover of 100,000 lots (2 million tons) and a daily holding capacity of 80,000 lots (1.6 million tons). Urea futures are generally active, but the downtrend is obvious. The domestic urea spot market was generally sold, and some transactions were active.

Last Monday, urea futures dipped sharply, falling from the highest price of 1,825 yuan (ton price, the same below) to a minimum of 1,775 yuan. The first reason is that the printing of the mark is 950,000 tons, and the domestic supply is less than 80,000 tons. There is basically no domestic profit, and the confidence of the long-term funds is frustrated. Second, the domestic urea spot transaction is general, and the price of many places has fallen. Affected by this, the long-term funds quickly reduced their positions after the opening, and some bearish funds entered the market, once again boosting the decline. On Tuesday, the spot transaction was light, and the ex-factory price and market price were lowered. The long-term funds slowed down and the short-term funds followed suit, and remained stable after a sharp decline. On Wednesday and Thursday, domestic prices fell, but the transaction in Shandong Linyi improved. Affected by this, the market opened on Wednesday, the bulls pushed up and left before the close, which inferred that there is a push to attract the retail investors to take the high position in order to make their own departure behavior. On Thursday, the urea futures market is still high and low, and the lightening behavior is obvious. On Friday, the spot price of urea, Hebei, Henan, Anhui, Jiangsu market prices remained stable, Shandong stabilized and fell, the southern general fell 10 to 40 yuan. In terms of futures, the confidence of the bears increased and the entry movement was obvious. The previous long-term funds have been converted into short-term funds, frequently increasing positions, and the disk continues to fall.

The domestic urea supply remained at a high level, the company's pre-sales were poor, and the inventory increased; the agricultural demand started slowly; the downstream compound fertilizer started to slow down, mainly due to the delivery of finished products; the urea-formaldehyde glue started normally, and the urea was used with mining. Internationally, this round of printing has limited support for domestic and foreign markets, but domestic urea sales in India are good and supply is insufficient, and demand for future bidding is strong. But in the current situation of high supply, the market does not buy the bullish factor.