Protein Meal: On Wednesday, CBOT soybeans hit a two-month high as the market anticipated improved demand for U.S. beans. Soybean meal futures rose while soybean oil futures declined. The USDA's May supply and demand report projected that ending stocks for U.S. soybeans in the 2026/27 marketing year would be lower than analyst expectations, with the decrease primarily attributed to higher-than-expected crush demand. The EU's shift away from Argentine soybean meal purchases to U.S. soybean meal supported the strength in U.S. meal prices. Market optimism for future agricultural product purchases was bolstered by trade talks between China and the U.S. this week. Domestically, protein meal prices followed the upward trend, maintaining a volatile but firm trajectory. Despite significant pressure from large soybean arrivals in May and severe losses in the livestock sector, which kept spot prices from rising as fast as futures, the basis market remained weak. There is no supply shortage for domestic soybean meal, but rising costs are steadily pushing the overall price level higher. Trading strategy suggests short-term long positions.
Oils and Fats: On Wednesday, BMD palm oil fell to a two-month low, pressured by weak demand from major buyers. India's pivot to purchasing Argentine soybean oil led to a decline in its palm oil imports to 513,000 tons in April, down 26% month-on-month. Malaysia announced the completion of technical integration with oil companies, ensuring supply chain, logistics, and infrastructure readiness for all blending depots. A relatively calm situation in Iran and a pullback in crude oil prices exerted downward pressure on vegetable oils. In the domestic market, oils and fats traded within a range, with palm oil showing relative weakness and soybean oil remaining comparatively firm. High supply pressure from palm oil origins and lower import costs contributed to palm oil's underperformance. With increasing rapeseed arrivals, crushing activity at oil mills has rebounded noticeably, leading to a gradual rise in rapeseed oil supply and inventory recovery. Slower customs clearance for Brazilian soybeans and an upcoming auction of 60,000 tons of imported soybeans suggest soybean oil inventories are likely to gradually accumulate. The strategy recommends short-term trading.
Live Hogs: On Wednesday, the nearby July 2026 live hog contract continued its weak performance, closing with a doji candlestick. The September contract outperformed July, stabilizing and rebounding. In the spot market, hog prices in Northeast China were largely stable with minor fluctuations. The mainstream transaction price in Heilongjiang was 9.18 yuan/kg, up 0.04 yuan/kg from the previous day. Prices in Jilin held steady at 9.34 yuan/kg, while Liaoning and Inner Mongolia saw unchanged prices of 9.58 yuan/kg and 9.46 yuan/kg, respectively. Overall, spot hog quotations remained stable, with Henan's price holding at the 10 yuan/kg level. The September contract presents a buying opportunity after the current adjustment concludes.
Eggs: On Wednesday, egg futures retreated from recent highs. The main June 2026 contract opened and trended downward, closing down 1.58% at 3606 yuan per 500 kilograms. The July 2026 contract followed suit, declining 1.17%. Spot data showed the national average egg price was 4.37 yuan/jin, unchanged from the prior day. In producing areas, Ningjin's pink-shell eggs were quoted at 4.3 yuan/jin (unchanged), while Heishan's brown-shell eggs were at 4.1 yuan/jin, down 0.1 yuan/jin. In consumption areas, Puxi's brown-shell eggs were 4.62 yuan/jin (unchanged), and Guangzhou's were 4.6 yuan/jin, down 0.03 yuan/jin. Short-term supply improvements have supported spot and futures prices. However, as spot prices rebound and farm profits increase, culling willingness weakens, which is not conducive to reducing future production capacity. Coupled with the upcoming rainy season, which makes traders cautious in building inventory, there is an expectation for lower egg prices. Opportunities for selling on rallies should be monitored, while remaining alert to potential disruptions from increased culling or strength in related commodity prices.
Corn: On Wednesday, the main July 2026 corn contract stabilized and rebounded near the 2350 yuan key level, marking a two-day rally and closing the week with a small bullish candlestick on weekly charts. Spot market prices followed futures higher, with slight gains in northern ports. However, prices in the Northeast producing region remained generally stable with a slight weak bias. Traders showed limited willingness to sell at low prices, and shipments from the Northeast to northern ports and consumption regions were not profitable, keeping market activity subdued. Prices in North China were mostly stable with minor local fluctuations. Specifically, deep-processing corn prices in Hebei and Henan remained steady, while arrivals at Shandong deep-processing plants continued to decrease, prompting most firms to raise prices by 6-10 yuan/ton. The market is still in a phase of clearing inventory ahead of the new wheat harvest, but traders are adjusting their selling pace flexibly based on price movements, maintaining a dynamic supply-demand balance. Corn prices in consumption regions were mainly stable, with some spot quotations edging higher influenced by stronger futures. The approaching new wheat harvest has led to a seasonal reduction in arrivals, providing some price support. Traders' willingness to hold for higher prices has increased, but downstream buyers are cautious, and overall demand remains weak. Technically, the July contract faces resistance near 2400 yuan. Given increasing substitute supply and insufficient downstream purchasing power, corn futures are expected to continue their medium-term downtrend.
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