In the spot market, the 2025/26 season has followed a pattern of starting high and then declining. The total inventory is relatively low, with the peak volume being about 810,000 tons less than the 2024/25 season. Additionally, the quality of the available stock is poor, with a low proportion of high-grade fruit. These factors supported a widespread sentiment of withholding sales to prop up prices in the spot market, leading to high spot prices before April. However, this reluctance to sell led to slower inventory drawdown, causing the market to miss some consumption windows. After the Qingming Festival, prices in the Shandong production area loosened and fell by approximately 20%. Following this price reduction, the pace of shipments showed some improvement.
In the futures market, new-season contracts saw a significant decline at the end of March. The AP2510 to AP2605 contracts exhibited a pattern of high delivery settlement prices but low delivery volumes, with the cost of warehouse receipts serving as the primary pricing anchor. Under pressure from the spot market and other factors, the delivery settlement price for the AP2605 contract was about 600 yuan per ton lower than that of the AP2604 contract.
The AP2610 contract, which represents the new-season apple futures, experienced a rapid decline starting from late March. This was primarily due to the high price base influenced by the AP2510 to AP2605 contracts and the persistent expectation of a bumper harvest, which has continued from the flowering period to the present. Exchange-traded options may be dominated by selling strategies, as indicated by the highest open interest in the AP2610C10000 and AP2610C10200 call options.
The expectation of a bumper harvest has not been significantly reversed during either the fruit set period or the bagging period. Simultaneously, attention should also be paid to the changes in the premiums and discounts for alternative delivery products starting from the AP2610 contract.
Looking Ahead
For the spot market, the remaining question is whether the accelerated inventory drawdown following the price cuts can bring stock levels back to historically low levels for the same period.
Regarding the new-season contracts, bagging data alone is unlikely to reverse the expectation of a bumper harvest. In the short term, the AP2610 contract may continue to be dominated by weak, wide-ranging fluctuations.
Potential adjustment conditions to monitor include summer drought (which affects fruit size), the opening prices for early and mid-season varieties, and weather conditions during the harvest period. One can also observe changes in the exchange-traded options market for AP2610 before the expiration of options at the end of August.
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