Soybean Meal: On Tuesday, CBOT soybean futures closed higher, with soybean oil futures hitting a new peak. U.S. soybean prices advanced, supported by technical buying, optimistic export demand expectations, and the strength in soybean oil futures. However, U.S. soybeans failed to surpass last week's highs, while soybean oil achieved a record gain. The February supply and demand report presented bearish factors, as it raised Brazil's soybean production estimate to 180 million metric tons and left U.S. soybean ending stocks unchanged. U.S. soybean oil supply and demand figures were also maintained, but global soybean oil production and inventories were revised upward. Following the agreement between the U.S. and India, market expectations for U.S. soybean oil demand remain optimistic. Domestically, soybean meal prices traded within a narrow range amid thin market activity. Rising import costs provided support to the domestic market, but ample supplies and increasing inventory pressure capped gains. Trading strategy suggests short-term participation, with the 5-9 spread position exited.
Edible Oils: On Tuesday, BMD palm oil futures declined, tracking losses in related markets. The MPOB report was bullish, showing Malaysian palm oil inventories dropped to 2.82 million metric tons in January, below expectations, driven by a surge in exports. High-frequency data indicated that Malaysian palm oil exports for February 1-10 fell by 10.5% to 14% compared to the previous period. U.S. soybean oil and Canadian canola futures rose, reflecting optimistic demand outlooks. Domestically, edible oil prices were mixed, with palm oil showing relative weakness. Strong gains in precious metals improved overall commodity sentiment, supporting edible oil prices. However, ample supplies and muted demand limited the upside. Trading approach recommends a short-term focus.
Live Hogs: On Tuesday, live hog futures continued their weak trend. The nearby March 2603 contract rebounded from lows, while the main May 2605 contract extended losses, closing down 0.82% at 11,470 yuan per ton. Zhuochuang data showed the national average daily hog price at 11.46 yuan per kilogram yesterday, down 0.2 yuan from the previous day. In the benchmark delivery region of Henan, the average price was 12.06 yuan per kilogram, a decrease of 0.24 yuan. Declines were also observed in Sichuan, Guangdong, Shandong, and Liaoning. Before the Spring Festival, high slaughter enthusiasm from farms ensured ample supply, keeping spot hog prices under pressure. Official data indicates that the long-term trend of reducing hog production capacity remains unchanged. Continued monitoring of capacity reduction progress is advised for its impact on distant contracts.
Eggs: On Tuesday, egg futures were mixed, with the main March 2603 contract edging up 0.07% to close at 2,911 yuan per 500 kilograms. Spot prices declined, with the national average egg price at 3.35 yuan per jin, down 0.07 yuan. In producing areas, Ningjin pink shell eggs held steady at 3.25 yuan per jin. In sales regions, Puxi brown shell eggs fell 0.18 yuan to 3.27 yuan per jin, while Guangzhou brown shell eggs remained unchanged at 3.5 yuan per jin. End-user demand was stable, with most traders purchasing as needed. Prices were mostly steady in sales regions, with isolated declines and some markets closed. As the Spring Festival approaches, demand is gradually recovering, leading to a continued correction in spot egg prices. Futures prices stabilized after reaching low levels. If breeding profits continue to decline following the spot price correction, it may support capacity reduction. A wait-and-see approach is recommended, looking for opportunities in distant contracts, while monitoring changes in farmer culling and restocking intentions.
Corn: On Tuesday, corn futures halted their decline and moved higher, influenced by gains in soybeans. In the week before the Spring Festival, positions in the March contract shifted to May, with spot markets closed awaiting direction from futures. Current market activity is subdued, with corn prices in Northeast China largely stable. Farmers show limited selling enthusiasm, and drying facilities are purchasing cautiously, with some already halted. Pre-holiday trading in the Northeast has essentially concluded, with low activity and minimal price adjustments. Northeast deep-processing plants have also suspended purchases for the holiday. Corn prices in sales regions adjusted within a narrow range. Some port traders raised prices slightly, while downstream markets experienced significant volatility. Downstream enterprises remain cautious, purchasing slowly and focusing on fulfilling existing orders. Overall, corn prices are expected to remain range-bound before the holiday, with low likelihood of sharp fluctuations. Technically, as the holiday nears, reduced futures market liquidity may lower price volatility, suggesting a short-term trading strategy.
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