Galaxy Futures: New fruit season expected to have increased production, paying attention to flowering weather

The fundamentals of the Apple 10 contract are relatively weak. First, the October contract is a new crop-season contract. Due to the obvious biennial bearing characteristic of apples, and since last year’s apple output clearly belonged to a low-yield year, this year is likely to be a high-yield year. Therefore, the market has expectations for increased production in the new crop season. Second, based on the current situation of flower buds on apple trees, the expectations for higher yields have been further strengthened. Third, the prior rise in the price of the Apple 10 contract was partly driven by the May increase, and partly because the market considered that, due to high accumulated temperatures in the producing areas this year, the apple flowering period would start earlier—so the probability of frost damage to apple blossoms increases, which supported stronger prices. However, with time passing to the present, the flowering period in some producing areas has already arrived, and the probability of frost occurring this year has decreased. As for the future trend of the Apple 10 contract, we believe that if a large-scale frost does not occur, prices are still likely to have room to move downward. However, since the fruit-setting period after the flowering stage is also crucial to apple output, we expect the probability of a sharp drop in the October contract within a short time to be relatively low. (Galaxy Futures)