Market sentiment across agricultural commodities was mixed on Tuesday, with various products showing divergent price movements influenced by a combination of international news, weather conditions, and domestic supply-demand dynamics.
Protein Meals:
CBOT soybeans declined on Tuesday as a result of an unexpected improvement in U.S. crop ratings and a slight easing in the threat level of the weather forecast for the Midwest, which triggered a fresh round of profit-taking. The latest crop report indicated that the U.S. soybean good-to-excellent rating stands at 65%, an increase from the previous week's 64% and exceeding market expectations of 64%. The market is now awaiting the NOPA report, with expectations that the U.S. soybean crush rate may have accelerated in June, supported by favorable crush margins. Data from Brazil’s National Association of Grain Exporters suggests that the country's soybean exports for July are projected to surpass previous estimates. Domestically, protein meal prices exhibited firm, range-bound trading, largely tracking import costs. The rise in crude oil prices, spurred by Middle East tensions, has contributed to higher global oilseed prices. Spot prices for protein meals experienced minor fluctuations, while oil mill operating rates increased, leading to a climb in both soymeal production and inventory levels. The pressure from ample spot supplies is expected to take time to be fully absorbed. With conflicting bullish and bearish factors at play, the commodity is likely to continue its range-bound trend.
Oils and Fats:
BMD palm oil advanced on Tuesday, following the upward movement in related markets and supported by rising crude oil prices. Data from India revealed that the country's vegetable oil imports in June fell to a 14-month low due to declining demand. Within this, palm oil imports dropped by 11% month-on-month, reaching their lowest level since April 2025. On July 13, the European Commission approved two measures to support the implementation of the EU Deforestation-Free Regulation, set to begin at the end of December. One delegated act updates and simplifies the list of products covered by the regulation, while an implementing act outlines the operational details for submitting due diligence and simplified statements. Notably, the regulation now excludes soybeans but includes certain palm oil derivatives, a move viewed as unfavorable for the future demand outlook of palm oil. In the domestic market, oil prices traded on a stronger note, buoyed by the surge in crude oil. However, gains were capped by high inventory levels and factors such as China reopening its market to Australian rapeseed imports, which points to increased future supplies. Market participants will continue to monitor the situation regarding shipping through the Strait of Hormuz and overall consumption trends for oils and fats.
Live Hogs:
The main live hog futures contract for September 2026 showed weakness on Tuesday before recovering somewhat in the afternoon session. By the close, the contract settled 0.29% higher at 12,050 yuan per ton. In the spot market, data indicates the national average price for hogs was 11.04 yuan per kilogram, down 0.14 yuan from the previous day. In the benchmark delivery region of Henan, the average price remained flat at 11.3 yuan per kilogram, while prices in Guangdong, Sichuan, Liaoning, and Shandong saw varying degrees of decline. On the supply side, some farmers are holding back sales at lower prices, and there has been an increase in secondary fattening restocking in certain areas, leading to an overall reduction in supply. However, demand-side support remains weak, resulting in a narrowing of price declines and stabilization in some regions. Based on current fundamental conditions, hog prices are likely to experience range-bound adjustments.
Eggs:
Egg futures continued their correction on Tuesday. The main August 2026 contract fell 1.6% to close at 4,609 yuan per 500 kilograms, while the September 2026 contract dropped 3.6% to settle at 4,366 yuan per 500 kilograms. In the spot market, the national average egg price was 4.69 yuan per jin, up 0.08 yuan from the prior day. In production areas, Ningjin pink-shell eggs traded at 4.6 yuan per jin, up 0.1 yuan, while Heishan brown-shell eggs were at 4.3 yuan per jin, also up 0.1 yuan. In consumption areas, Puxi brown-shell eggs were priced at 4.91 yuan per jin, up 0.11 yuan, whereas Guangzhou brown-shell eggs traded at 5.03 yuan per jin, down 0.02 yuan. Terminal markets are purchasing based on immediate needs, with downstream procurement activity at normal levels, supporting a continued rise in spot egg prices. Supply-side factors continue to underpin prices. Looking ahead, as southern China exits the rainy season and gradually enters the peak annual demand period, expectations for egg prices remain cautiously optimistic. Futures prices, however, extended their correction from recent highs. Post-market data showed that the top 20 short positions exceeded the top 20 long positions. Market focus remains on the impact of culling of older hens and cold-storage eggs on spot prices, as well as the influence of overall market sentiment on futures trading.
Corn:
Corn futures continued to trade within a narrow range on Tuesday, with prices undergoing a position-shedding adjustment influenced by declines in related commodities. The main September 2026 contract faced resistance at the 40-day moving average, leading to a pullback and a narrowing of its trading range. In the spot market, prices in Northeast China remain generally soft. While traders in production areas are willing to sell, and the purchase price of 2,320 yuan per ton at northern ports is gradually being accepted by them, the pace of grain transactions in the Northeast remains slow. Deep processing procurement has largely stalled, and purchases by southern enterprises are also limited. Lackluster demand is curbing any near-term upward momentum. In North China, corn prices are stable to slightly weaker. Traders hold inventories that are higher year-on-year, and as the trading season progresses, their willingness to sell is increasing. Downstream enterprises show little enthusiasm for procurement, opting mainly to purchase based on immediate needs. In the short term, the supply-demand environment remains relatively loose, pointing to a stable-to-weak price trend. In consumption areas, corn market offers are generally stable with minor upward adjustments in some regions, supported by a firmer futures market which has bolstered some traders' pricing sentiment. However, downstream demand continues to be weak, with feed mills primarily drawing down existing inventories and showing no intention for large-scale stockpiling, keeping overall trading volume at low levels. Overall, the corn market appears to be in a stalemate in July, awaiting new directional cues from weather developments. International grain costs are being pushed higher by weather concerns, while the domestic market continues to monitor weather progress closely. Additionally, attention will be on changes in the pace of trader sales and the rhythm of potential policy stock releases.
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