Corn: Neutral 1. Market Focus: Prices opened higher yesterday, influenced by movements in crude oil, ethanol, and the CBOT market. However, the rally was unsustainable due to a lack of clear signals on grain volume releases. The market showed resistance to the unhealthy upward trend that has persisted since early April, characterized by delayed bearish news amid tight supply. Prices retreated to around 2350 in the afternoon, continuing their weak performance. Substitution of grains in feed formulations is gradually expanding. The market awaits further digestion of grain inventories and price movements. In the short term, until early June, the pricing benchmark set by new wheat harvests may become a key variable signaling the exhaustion of bearish factors. Downward pressure is strengthening under expectations of a bumper harvest. While feed costs for soybean meal and corn are declining and approaching support levels, note that wheat substitution is still being priced in. Short-term strength in spot purchases and sales does not constitute a sustained bullish factor. The market's reaction to news about rice auctions has diminished, reducing the need for close monitoring. 2. View Summary: Adopt a wait-and-see approach. Downside resistance continues to strengthen, with limited support from external markets. Support is relatively strong around 2320 yuan/ton.
Soybean Meal: Neutral to Bullish 1. Following a sell-off last week triggered by insufficient details from the US-China leaders' meeting, overseas markets are reassessing agricultural purchase expectations indicated in the White House announcement. Overnight, CBOT soybeans rebounded above 1200 cents. The White House stated that China has committed to purchasing at least $17 billion in US agricultural products annually in 2026, 2027, and 2028, while continuing to fulfill soybean purchase commitments made for 2025. Meanwhile, China's Ministry of Commerce indicated over the weekend that both sides agreed to promote two-way trade, including in agricultural products, through arrangements such as reciprocal tariff reductions on certain goods. This suggests US soybeans may resume commercial exports to China. 2. However, during the South American supply window, even if US soybean import tariffs are subsequently removed, domestic commercial oil mills may still opt for relatively cheaper South American soybeans in the short term. This would anchor actual import costs to a combination of "CBOT soybeans + South American CNF" until forward CNF quotes for the new US soybean crop become available. View Summary: Prices are expected to trade stronger today, influenced by the US market. Monitor the performance of the September soybean meal contract within the 3000-3100 yuan/ton range.
Eggs: Neutral Spot prices in major producing regions declined. In Guantao, Hebei, spot quotes were 4.24 yuan/jin, down 0.09 yuan/jin from the previous day. Spot markets experienced a significant adjustment. Recent developments warrant attention: 1) Breeding profits reached their highest level in five years for the same period, with static breeding profits this week at +1.05 yuan/jin, up 0.29 yuan/jin week-on-week; 2) Molting age has increased again, with this week's molting age at 518 days, up 4 days week-on-week, indicating a further intensification of delayed molting. From a marginal fundamental perspective, the positive feedback from rising spot prices is strengthening breeders' willingness to delay molting and hold back sales. Near-month contracts are primarily driven by basis convergence in the short term. Considering the strengthening of delayed molting sentiment and the potential for concentrated release of new production capacity after June-July. View Summary: Significant divergence exists for near-month contracts. For deferred contracts, consider establishing short positions on rallies, anticipating pressure from capacity release.
Live Hogs: Neutral to Bearish Live hog spot prices were volatile. The average spot price in major producing regions yesterday was 9.53 yuan/kg, unchanged from the previous day. On May 14, the Ministry of Agriculture and Rural Affairs released a new version of the "Comprehensive Regulation Implementation Plan for Hog Production Capacity," lowering the normal inventory of breeding sows to 37.5 million head. The futures term structure has shown significant divergence, featuring a pattern of near-month weakness and deferred-month strength. This reflects market expectations for policy adjustments in the near term, while the deferred-month premium driven by these expectations requires further validation from future capacity reduction data. Guidance from the latest piglet data indicates that newborn piglet numbers in April increased by 0.7% month-on-month. Despite a significant drop in spot prices in April, newborn piglet numbers rose month-on-month, reflecting the industry's strong counter-cyclical resilience and the current difficulty for market forces to drive capacity reduction. View Summary: For near-month contracts, range-bound trading is suggested. Deferred-month contracts face short-term adjustment pressure due to their high premium levels. Medium to long term, consider establishing long positions in deferred-month contracts on dips within lower ranges.
Risk Disclosure: The information herein is prepared by the analyst team of the futures company's Research & Development Department. The information is sourced from publicly available materials. While CITIC Securities Futures strives for accuracy and reliability, it makes no guarantees regarding the accuracy or completeness of this information. Trading based on this information is at one's own risk. This report does not constitute personal trading advice and does not consider individual clients' specific trading objectives, financial situations, or needs. Clients should consider whether any opinions or suggestions herein are suitable for their particular circumstances.
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