Soybean Meal: On Wednesday, CBOT soybeans declined, pressured by falling crude oil prices which weighed on both soybeans and soybean oil, coupled with generally favorable weather conditions for U.S. crop development. The market awaits guidance from the export sales report scheduled for release on Thursday, with expectations for U.S. soybean net sales to have increased by 150,000 to 650,000 metric tons last week. Abiove indicated that Brazil's soybean ending stocks are projected to reach a nine-year high by 2026, as production surpasses 180 million metric tons, exports reach 114 million metric tons, and stocks climb to 8.25 million metric tons. Domestically, soybean meal prices followed the upward trend, maintaining a firm and volatile pattern. Despite significant pressure from high soybean arrivals in May and severe losses in the livestock sector, which have led to stagnant spot prices relative to futures and continued weak basis markets, there are no immediate supply concerns for domestic soybean meal. Rising import costs are providing underlying support. Trading strategy: Consider short-term long positions.
Vegetable Oils: On Wednesday, BMD palm oil closed nearly flat. Concerns over potential supply tightening due to Indonesia's plans to establish a state-owned agency to manage commodity exports were offset by weak export data. Shipping surveyor data showed May 1-20 exports fell between 13.9% and 20.5% compared to the previous period. Canola futures closed lower, dragged down by the slump in crude oil prices affecting energy-linked commodities. However, seasonal price trends helped limit the decline in canola, as farmers are busy with spring planting, limiting sales activity. Domestically, vegetable oil markets showed strength. Rising palm oil import costs drove the domestic market higher. With increasing rapeseed arrivals, crusher operations have notably recovered, leading to a gradual increase in rapeseed oil supply and inventory replenishment. Slower customs clearance for Brazilian soybeans and a recent auction for 60,000 metric tons of imported soybeans suggest soybean oil inventories are likely to gradually accumulate. Strategy: Consider long positions.
Live Hogs: On Wednesday, live hog futures prices moved within a narrow range. The nearby July 2026 contract continued its weak performance this week, while spot hog prices remained stable, leading to a convergence of futures premiums. Spot market hog quotations were steady with minor adjustments. Prices in Heilongjiang were stable, while prices in Henan saw a slight increase. In Heilongjiang, the mainstream transaction price was 9.00 yuan/kg, unchanged from the previous day. In Jilin, the mainstream price was 9.12 yuan/kg, also flat. In Liaoning, the mainstream ex-farm price was 9.35 yuan/kg, down 0.07 yuan/kg. In Inner Mongolia, the mainstream price was 9.26 yuan/kg, down 0.08 yuan/kg. In Henan, the average ex-farm price was 9.97 yuan/kg, up 0.06 yuan/kg from the previous day and 0.12 yuan/kg from last Friday. Large farms sold 120-130 kg breed pigs at 9.90-10.15 yuan/kg, with a high of 10.25 yuan/kg. Medium and small farms sold 120-125 kg pigs at 9.60-9.80 yuan/kg. 155-165 kg breed pigs were sold at 9.80-10.00 yuan/kg. Technically, spot market quotations remain stable, with Henan spot prices holding around the 10 yuan/kg level. The July contract is undergoing a price correction, while the September contract awaits a buying opportunity post-adjustment. Consider short-term long positions for now.
Eggs: On Wednesday, egg futures continued their strong upward move. The main July 2026 contract closed up 3.69% at 3,931 yuan per 500 kg. Spot prices, according to SCI data, showed the national average egg price at 4.33 yuan/jin yesterday, down 0.02 yuan/jin. In production areas, Ningjin pink-shell eggs were at 4.25 yuan/jin, and Heishan brown-shell eggs were at 4.1 yuan/jin, both unchanged. In consumption areas, Puxi brown-shell eggs were at 4.4 yuan/jin, down 0.11 yuan/jin, and Guangzhou brown-shell eggs were at 4.6 yuan/jin, down 0.05 yuan/jin. Terminal consumption varied, with most traders purchasing based on demand. Prices in most consumption markets were stable, with a few declines. Tight short-term supply coupled with relatively good terminal demand and low inventory levels are supporting near-term egg prices. As southern regions gradually enter the rainy season, spot egg prices may be impacted by cautious trader stockpiling, increasing the likelihood of a seasonal correction. However, given the current tight supply situation, the extent of the correction is expected to be less than anticipated. Monitor changes in farm restocking and liquidation intentions following increased profitability for their impact on supply.
Corn: On Wednesday, corn futures prices moved lower in volatile trading. The main July 2026 contract retreated back to the 2,350 yuan integer level. In the spot market, expectations for a higher proportion of sprouted wheat due to rainy weather have pressured corn futures, which showed volatile performance amid expectations of increased substitute supply. Today, corn prices in Northeast China were stable to slightly weaker, with subdued market activity. Some higher-priced offers found it difficult to secure deals, requiring slight price concessions for transactions. Traders in production areas currently maintain a steady mindset, mostly adopting a wait-and-see approach with limited willingness to sell at low prices. In North China, corn prices were generally stable with minor local fluctuations. On the supply side, traders still have inventory release needs, but recent overcast and rainy weather have led to unstable arrivals at processing plants. Downstream enterprises have adequate inventories and are purchasing based on demand. Prices are expected to fluctuate within a narrow range in the short term. Monitor the progress of new wheat harvests and the implementation of targeted rice auctions. In consumption areas, corn prices were mostly stable. Downstream procurement sentiment remains cautious. Tight remaining grain supplies are supporting trader price-holding sentiment, providing a floor. However, port transaction activity is low. Feed enterprises are buying as needed, with light procurement, as substitute products are crowding out corn demand. Overall, the corn market continues to focus on pressure from wheat harvests, rice auctions, and imported grain arrivals on corn supply. Mid-term corn price expectations remain biased to the downside.
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