Guidance prices are favorable in stimulating a significant increase in urea prices.

Today, a news of the association raising the self-discipline guidance price of urea in the market ignited bullish sentiment. From the perspective of the market, the increase in the guidance price is interpreted by bulls as lifting restrictions on subsequent spot prices and stabilizing upward, thus driving urea futures prices to rise strongly. However, there is still a gap between actual guidance prices and spot transaction prices, and this round of urea futures adjustment has not touched the bottom cost support before rebounding significantly. In addition, the previous low inventory situation has eased, and there is still no obvious improvement on the demand side. Overall, if the spot transaction prices in the future do not show a clear improvement, there is still a slight downward space for urea futures; if spot transactions improve, considering that there is still a peak in fertilizer use downstream, short-term urea futures are not lacking in upward momentum for fluctuations. It is recommended that investors rationally view positive expectations and follow with a right-side low long approach.