Soybean Meal: On Wednesday, CBOT soybeans declined as hopes for a ceasefire in the Middle East intensified, prompting capital outflows from commodity markets. Soybean meal futures rose, while soybean oil futures fell. The U.S. monthly soybean crush data met market expectations, with February's crush volume reaching 6.43 million tons, higher than the same period last year. Favorable production prospects for South American soybeans, with high estimates maintained for both Brazilian and Argentine soybean outputs, ensure ample global supply. Domestically, soybean meal prices fluctuated, continuing the pattern of near-term weakness and long-term strength. However, rising import costs are providing upward pressure on meal prices. A retreat in live hog spot prices and expectations of accelerated reduction in breeding capacity are negatively impacting soybean meal consumption. Spot transactions for soybean meal remain sluggish. Cost factors are the primary market driver; short-term trading is recommended.
Vegetable Oils: On Wednesday, BMD palm oil closed lower despite the announcement of Indonesia's B50 blending implementation timeline. Expectations of reduced procurement demand from India weighed on Malaysian palm oil prices. Additionally, SPPOMA estimated that Malaysian production for March 2026 decreased by 5.27% month-on-month. U.S. soybean oil and Canadian canola oil fell, dragged down by a sharp decline in crude oil prices affecting the global vegetable oil complex. Domestically, vegetable oil markets followed the downward trend, moving in line with import costs. Spot prices fluctuated, with the price spread between soybean oil and palm oil exceeding 1,000 yuan/ton, which is curbing palm oil consumption. Expectations of a decline in soybean crushing volumes suggest a potential reduction in soybean oil inventories, supporting firm spot basis levels. Among the varieties, palm oil showed relative strength compared to soybean oil and rapeseed oil. End-users remain cautious, purchasing on an as-needed basis. With potential de-escalation of U.S.-Iran tensions and the approaching Qingming Festival holiday, capital is expected to flow out of the market, suggesting range-bound movement for vegetable oils. Strategy-wise, short-term participation is advised.
Live Hogs: On Wednesday, live hog futures continued their weak trend. The main May 2605 contract fell 1.64% to close at 9,610 yuan/ton, while the July 2607 contract declined 1.16%. Spot prices were largely stable. Data showed the average national daily price was 9.42 yuan/kg, unchanged from the previous day. In the benchmark delivery region of Henan, the average price edged up 0.04 yuan/kg to 9.56 yuan/kg. Prices were mixed regionally, with increases in Sichuan, stability in Guangdong, and declines in Liaoning and Shandong. Slaughter volumes were moderate, coupled with cautious sentiment regarding restocking, providing limited support for hog prices, leading to a generally weak and stable trend. Reduced slaughter volumes in some areas provided minor support, resulting in small price increases. Until supply pressures are effectively alleviated, hog prices are likely to remain weak. Market participants are monitoring changes in feed costs and related commodity prices for their impact on hog prices.
Eggs: On Wednesday, egg futures corrected lower. The main May 2605 contract moved sideways in the morning session but fell in the afternoon, closing down 0.73% at 3,415 yuan/500 kg. Spot egg prices weakened. The national average price was 3.28 yuan/jin, down 0.02 yuan/jin from the previous day. In production areas, prices in Ningjin were stable at 3.15 yuan/jin for pink-shell eggs, while prices in Heishan fell 0.10 yuan/jin to 3.10 yuan/jin for brown-shell eggs. In consumption areas, prices in Puxi declined 0.05 yuan/jin to 3.48 yuan/jin, and prices in Guangzhou fell 0.05 yuan/jin to 3.50 yuan/jin for brown-shell eggs. End-market procurement is need-based, with stable downstream purchasing. Supply remains relatively ample, leading to continued weakness in spot egg prices. By the end of March, China's layer hen inventory increased month-on-month, and chick placements continued a slight upward trend. Until a substantial improvement in supply occurs, eggs are expected to trade within a range. Supported by cost factors, the floor for egg futures prices has risen. Market focus is on changes in farmers' culling intentions and their subsequent impact on supply.
Corn: On Wednesday, corn futures initially rose but then fell, continuing their volatile performance. The May contract saw continued position reduction and closed with a doji candlestick pattern. Spot prices in Northeast China were predominantly weak. Deep-processors have replenished some inventory, leading to a decline in purchase prices. News regarding policy grain auctions in early April remains prevalent, and market participants continue to monitor auction developments closely. The overall supply and demand dynamics have not yet shifted, suggesting prices will primarily adjust within a narrow range. In North China, farmers' grain reserves are decreasing. Traders maintain medium to long-term bullish expectations, showing strong price support sentiment. After a period of concentrated selling, arrivals at deep-processing plants have gradually decreased, pointing to stable to slightly firmer prices. In consumption areas, corn prices are generally stable to slightly weaker with light trading activity. Regional divergence persists, and the inverted price relationship between production and consumption areas continues to dampen inter-regional transfer enthusiasm. Enterprises mostly maintain low inventory levels with small, rolling replenishments, showing low acceptance for high-priced raw materials and generally weak procurement sentiment. Overall, futures are consolidating weakly, deep-processor purchases are softening, grassroots supply is slightly loose, and the market is focused on policy grain supply. Corn prices are expected to trend weakly in the short term.
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