From first acquaintance to deep integration is the inevitable result of market choice.
Since 2000, domestic private feed enterprises have developed rapidly and gradually become the main force of feed breeding industry. Compared with state-owned enterprises, private enterprises are more agile in production and operation and the use of derivatives. Some of them gradually found the best way to integrate futures and cash in their own exploration, and some of them changed from passive acceptance to active learning under the impetus of basis trading in upstream oil plants. Nowadays, the futures market has become the main channel for the feed industry to reduce costs and prevent risks.
Hefeng Animal Husbandry is a feed breeding enterprise based in Northeast China. Its first contact with the futures market was around 2000, when the domestic futures market just started. Sun 1997, vice president of Hefeng Animal Husbandry, fell into the company and did due diligence on purchasing business for more than 20 years. He recalled to the reporter of Futures Daily that at that time, the company's understanding of futures was only in the primary stage, that is, a simple type of investment, and Yi Xi used leverage to do small and wide through the futures market. The road of market research of Hefeng animal husbandry was also opened, so they paid part of the "tuition fee" and accumulated experience. Around 20 10, with the support of senior management, they began to try to upgrade their futures operations and gradually changed from investment-oriented to tactical.
From companies that trade according to their own wishes to hedging corn and soybean meal according to the purchase and sale of upstream and downstream industries. In Sun's personal experience, the cognition and application of futures in feed industry chain enterprises have developed rapidly in recent years and become increasingly mature.
"In the feed enterprises in the north, we contacted and used futures earlier. Enterprises in the southern feed industry chain have higher awareness and acceptance of futures. " Sun dui said: the reporter also learned that most of the top ten feed enterprises in South China are involved in the trade of rare goods. "On the one hand, large enterprises start to do it, and small enterprises will naturally catch up. On the other hand, the implementation of basis trading in upstream large oil plants has a profound impact on the risk management awareness and means of feed breeding industry. Today, futures have become an inseparable basic tool for industrial chain enterprises. "
In the tide of market development, the feed industry chain enterprises that gradually understand the power of futures also include the twins established by 1998. Like Hefeng Animal Husbandry, twins used to buy raw materials directly from traders. How much corn and soybean meal they need in the month, they go to the market to buy it, regardless of what to do in the long run. "Around 2004, we witnessed a major reshuffle of CNPC, which had a great impact on the industry. The reason is that futures hedging was not used when purchasing, which led to the closure of most domestic oil plants, and multinational oil companies fell into the China market one after another, changing the original pattern of domestic oil plants. " Zhang Qirong, general manager of Double Grain Department, said that as a downstream enterprise, he was shocked and began to have a preliminary understanding of the futures market. "For more than a decade, from the development course and practical application of twins, futures are an indispensable tool for feed enterprises. In the stage experienced by oil plants, feed enterprises are also experiencing or will be on the verge in the future. If you don't learn to use futures tools now and don't hedge, the development of feed enterprises in the future will be on the verge of great problems. "
Zhang Qirong recalled that the twins began to set foot in the futures market around 2005, and they were also speculative transactions at the beginning. With the gradual realization of the function of futures service entity in practice, futures are increasingly regarded as a tool for risk hedging. "Especially in recent years, enterprises are not competing for the skills of spot procurement, and future procurement will be on the verge of medium and long-term layout challenges. In the era of global integration, more consideration should be given to the procurement after three months or six months. There is a greater chance of doing well and a greater risk of not doing well. This requires the use of the futures market and futures as an auxiliary means of procurement. As a hedging tool. "
If the feed industry didn't know about futures until it witnessed the painful lessons of the upstream industry, and the awareness of risk management gradually matured under the subtle influence of big oil plants, then the operating experience of feed varieties such as soybean meal and corn greatly helped the downstream laying hens to understand and accept the gift of egg futures in a short time. According to Li Qingyi, general manager of Shen Dan, Shen Dan used to be a state-owned enterprise that raised pigs. Later, the enterprise was restructured, and Shen Dan relied on Hubei's geographical advantages to do egg breeding, and quickly developed into a leading egg processing and breeding enterprise in the industry. In Shen Dan and even in the egg industry, Li Qingyi is an enterprise manager who came into contact with futures earlier. "Before and after 2002, among feed-related varieties, only individuals did some futures trading, and there was no company level. Because I deal with the spot every day, I find that as long as the futures go up, the spot will go up, and the soybean meal and corn are obvious, so I will buy a little when the price is low. "
With these experiences, Shen Dan Group actively participated in the market at the beginning of the listing of egg futures. Li Qingyi said, "In egg futures, Shen Dan participated earlier. As early as in the research stage before the listing of egg futures, experts from big business offices visited Hubei and Shen Dan many times. Every time I participate, I not only participate in the discussion, but also participate in the formulation of relevant rules. " Li Qingyi proudly said that it was a miracle that 20 13 was the chief listing of egg futures, and he witnessed this meaningful moment on the spot. "Egg futures is the development direction of Shen Dan futures market. After calculation, we can determine when to get the chicken; At the same time, Shen Dan also uses the futures market to lock in acceptable egg prices, which is convenient as the basis for egg price concessions when selling at supermarket terminals. "
The industrial chain is becoming more and more familiar with the use of derivatives.
In the past 40 years of reform and opening up, the spring breeze and rain have nourished the continuous development of feed breeding industry chain enterprises, among which the futures market has provided an indispensable driving force. In Sun's view, the futures market has played an important role in the process of Hefeng animal husbandry development in response to industrial changes. On the one hand, it provides price guidance for the purchase and sales of enterprises through the function of price invention. "We can only predict the price in the last month or two at most, and the futures market can see the forward price after 1 year, so that enterprises can have a basic judgment on the future trend." This also promotes the preparations for the production and operation of the industry. "According to the futures price, the purchase quantity of the month can be determined, and the procurement progress is more planned."
On the other hand, with the continuous improvement of the application of futures tools in the industry, futures is not only an important tool to resist risks, but also a means to reduce costs and increase efficiency in many industries. For example, Sun said: "Feed enterprises have purchasing needs and are natural bulls. Under normal circumstances, you can only buy one month's spot, at most two months. When the goods are returned, you must pay the amount you should pay. The futures market gives us more time to choose, and we can buy goods from far away. We negotiated with suppliers that * * * will operate in the futures market, and the required funds will be much less than those directly purchased from the spot. "
In traditional hedging, enterprises buy the base price and lock in the price cost. But this is a forward contract. If futures go up, "point price" is right for enterprises, but it is only floating profit. In order to avoid the risk of price decline in the later period, enterprises can usually sell futures and lock in the price profit. Sun said that if the enterprise procurement basis is 100 yuan and the futures price is 3,000 yuan/ton, the procurement cost is 3 100 yuan/ton. If the futures price rises to 3 100 yuan/ton the next day, enterprises can sell futures in the futures market, thus locking in the profit of 100 yuan/ton.
For Hefeng Animal Husbandry, after years of investment and exploration in futures and derivatives, they have established a relatively mature trading concept, dedicated developers and strict rules and regulations. In addition to traditional hedging and month-by-month arbitrage, the basis trading is skillfully combined with futures and options operations, and remarkable results have been achieved.
For basis trading, Sun believes that although the basis trading model has become a perfect guarantee for oil plants and the risk has shifted to downstream enterprises, with the continuous development of the market, basis trading has also brought opportunities to feed enterprises. In his view, without basis, there is no right to choose prices. The key is how to make better use of the foundation to serve the production and operation of enterprises. "Since the base price is an advanced trading method, we should make good use of it. Hefeng Animal Husbandry began to do basic trade five or six years ago, and now this model accounts for a relatively high proportion in soybean meal procurement. Oil plants also constantly use the basis to improve services and use the futures market to help feed enterprises hedge. "
20 17 After the first commodity options tool, soybean meal option, was listed, Hefeng Animal Husbandry began to try to combine basis trading with option trading to better lock in the procurement cost. "In March this year, when the futures market price was around 3,060 yuan/ton, the average cost of our spot price was only around 2,990 yuan/ton through the option combination strategy provided by the oil factory, and there was no additional cost because of the reasonable option combination. Through this strategy, we indirectly saved the company's procurement cost of 70 yuan/ton. " Sun said:
He said: "In the traditional spot transaction, the supply and demand sides are always in a state of competition. Since the introduction of the basis futures trading, both of us can profit from the futures market in the transaction and achieve a win-win situation. "
Hefeng animal husbandry has been at the forefront of the industry from early testing of water futures to taking the lead in trying option tools. In May 20 17, the new contract of Soybean No.2 was officially listed. In February 2065438, Shenyang Hefeng Puffed Feed Co., Ltd., a subsidiary of Hefeng Animal Husbandry, tried to cash out the first order of soybean No.2 ... At that time, Li Mingjun, senior purchasing manager of Liaoning Purchasing Center of Hefeng Group, said that the current cash allocation was to negotiate the purchase price according to the actual quality of soybeans stored in the warehouse, which could avoid the risk of soybean quality change in the early transportation process and solve the risks of foreign trade logistics and exchange rate. In the future, the company will also participate in the delivery of soybean No.2 futures, hoping that the wing cash delivery will become a stable soybean procurement channel.
Now enterprises can adopt hedging strategies such as raw material procurement and profit locking according to business needs. In addition to increasing capital investment, we also set up a research team to train our own research and trading talents. In Hefeng Animal Husbandry's view, in the future, according to the needs of corporate strategy, the cash system including system, capital, R&D, risk control and incentives will be reformed, and targeted investment will be made to make the operation of futures and derivatives deeply integrated with spot operation.
Industrial scale and systematization of derivatives complement each other.
For feed breeding enterprises that are integrating more than ten ways in the research period, every optimization of contract rules also promotes their participation in the futures market. In Li Qingyi's view, the most unforgettable thing is the new system of delivering eggs and cars every month, which was implemented in 20 17. "Because the new system is more in line with the characteristics of eggs as fresh agricultural products with short shelf life and instant selling, it has increased the market deliverable and greatly improved the enthusiasm of industrial enterprises to participate in futures hedging. At present, futures delivery has become a good egg selling channel for surrounding laying hens. " Li Qingyi pointed out, "Especially at the beginning of 20 17, the spot price of eggs continued to fall, and the industry suffered serious losses. Egg futures provide an effective risk management tool for the laying hen breeding industry to help enterprises tide over the difficulties smoothly. "
The reporter learned that in order to be closer to the spot reality and give full play to the function of the futures market service industry, Dashang made full use of the egg contract and innovatively introduced the monthly daily delivery and vehicle delivery systems. Different from the one-time delivery method with only one delivery date for a contract, under the daily delivery method, the seller's customers can voluntarily declare delivery from the first trading day to the trading day before the last trading day of the delivery month, and the maximum delivery date of a contract is increased to 18. At the same time, on the basis of the existing standard warehouse receipt delivery, pallet delivery is added, and the seller can load the goods onto the buyer's pallet at the pallet delivery place designated by the exchange, which not only fits the spot transaction of eggs, but also reduces the storage loss and other expenses.
After the implementation of the new system, due to the reduction of delivery cost and the improvement of delivery convenience, spot arbitrage is smoother and the operation quality of futures market is further improved. The egg futures market has not only greatly increased in scale, but also significantly improved in liquidity, and the correlation between futures and cash has increased. In addition, egg futures have become the most active non-159 contract agricultural futures in China.
"In the near future, whether it is the feed industry or the aquaculture industry, large-scale and group development is an inevitable trend." Sun told the reporter of Futures Daily that in addition to the main feed industry, Hefeng Animal Husbandry is still actively deploying aquaculture. "As a feed enterprise, we also need to make relevant layouts in advance to promote the scale and group development of enterprises." With more than 20 years of working experience, Sun witnessed the development process of feed industry from small to large. In his view, the integration of feed industry will be accelerated in the future, especially in Jiangnan, especially in Guangdong. "Feed enterprises must reduce production costs and expenses through scale and improve efficiency in order to be more competitive. The survival of small and medium-sized enterprises will become more and more difficult, the advantages of large enterprises will be more concentrated, and the direction of the feed industry will be more professional and larger. "
Not only will the feed industry show a large-scale development trend in the future, but in Li Qingyi's view, so will the laying hen breeding industry. "In the first decade or so, raising chickens was basically a four-year cycle, that is, it would experience a big loss in the industry every four years." Li Qingyi said that there were many small and medium-sized chicken farmers at that time, and their ability to resist risks was poor. When the situation is bad, they will withdraw from the market because of losses. The surviving chicken farmers gradually grew up in the market experience, learned and began to use risk management tools, and had more endurance and capital reserves when the market was bad, waiting for the arrival of spring. Small households withdraw, and large households become bigger and bigger, which is the development trend of laying hen breeding industry.
This large-scale and collectivized development trend of feed breeding industry chain enterprises has laid a foundation for them to make better use of derivative tools. Sun believes that under the background of such industrial development, the application frequency of derivatives in the actual operation of enterprises will be higher, and the combination of maturity and present will be closer. "The futures market constantly optimizes contract rules to better serve the industry; For the industry, we should also study the rules of futures and make full use of the futures market. Industry and futures go together and work together, and the speed of integration will be faster and the efficiency will be higher. "