Corn: Neutral 1. Market Focus: Expectations for reserve sales have diminished. Last week, China Grain Reserves Corporation subsidiaries sold a total of 81,400 tonnes, failing to meet earlier anticipations of a shift from testing to increased sales. Conversely, reserve purchases were substantial with high turnover; subsidiaries purchased 656,000 tonnes last week at an 85% total clearance rate. Deep processing inventories have confirmed a rebound from their bottom. National corn processing inventories stand at 4.063 million tonnes, marking the definitive end of the destocking cycle that began in early February from a high of 5.438 million tonnes. The cumulative decline from the peak has narrowed from 37.8% to 25.3%, essentially confirming the inventory floor. The hog-to-corn price ratio has triggered a primary alert: with the ratio below 5.1, the industry is in a phase of severe losses. 2. View Summary: The recent short-term strength in corn prices is entering a phase of rebalancing between bullish and bearish forces. On one hand, inventories for deep processing and feed use have bottomed out, and substitution pressure from wheat is gradually increasing, limiting upward momentum beyond 2400 yuan/tonne. On the other hand, expectations surrounding state reserves, imports, and new-season planting are leading to a loosening of the previous supply hoarding mentality among distributors. A range-trading approach is anticipated for the week, with a support level at 2350 yuan/tonne and resistance at 2430 yuan/tonne.
Soybean Meal: Neutral 1. The U.S. Environmental Protection Agency officially announced biomass-based diesel blending volume obligations for 2026-2027. Overnight, U.S. soybean oil and soybean futures exhibited a "buy the rumor, sell the fact" pattern. Medium-term, the final rule is still expected to reinforce the outlook for expanded U.S. soybean crushing, supporting the price floor for distant month contracts. 2. Short-term market focus is on the month-end Prospective Plantings report. It is important to note that this report is primarily based on farmer surveys from the first half of March and may not fully incorporate the impact of geopolitical conflicts on input costs, crop price ratios, and final planting decisions. Subsequent validation will be needed based on actual planting progress and the June Acreage report. 3. Dalian soybean meal futures have entered a consolidation phase after several days of correction. There is currently no new public information indicating that China and Brazil have reached a final agreement on soybean quarantine rules, suggesting that expectations for soybean arrivals could remain volatile. View Summary: Funds are rolling into the September contract. Prices may still be influenced near-term by expectations for future soybean arrivals, while the medium-term trend will be anchored to movements in the U.S. market.
Eggs: Neutral Spot prices in main production areas have declined. The spot price in Guantao, Hebei is reported at 3.09 yuan/jin, down 0.09 yuan/jin from the previous day. Attention is on long profit-taking opportunities ahead of the Qingming Festival. Medium-term, be cautious of demand softening, favoring short positions on rallies, while monitoring data on hen culling and chick placements. The supply-demand balance shows a tendency for marginal improvement in the second quarter of 2026, with the futures market recently beginning to price in this slight improvement. Considering the marginal easing of production capacity pressure in the egg market, there may be structural long opportunities within the year. For the latter half of 2026, monitor the risk of higher chick placements in the first quarter translating into new production; the strategy should primarily involve selling on rallies. View Summary: Look for opportunities to establish long positions in contracts for the end of the second quarter and the peak demand period in the third quarter on price dips.
Live Hogs: Neutral Spot hog prices are experiencing minor fluctuations. The average spot price in main production areas was 9.41 yuan/kg yesterday, up 0.04 yuan/kg from the previous day. Continued price declines have strengthened reluctance to sell among small-scale farmers. Some large-scale farms reduced sales volume towards the end of the month and over the weekend. Recently, enthusiasm for purchasing lighter-weight hogs for fattening has increased at lower price points. Influenced by spot prices, the price of weaned piglets has fallen to around 240 yuan/head, leading to a continued reduction in restocking意愿 among breeders. The National Development and Reform Commission has initiated a second round of central frozen pork reserve purchases, planning to buy 150,000 tonnes, aiming to stabilize market expectations and signal counter-cyclical adjustment. View Summary: Near-term fundamentals show little sign of improvement. For deferred months, focus on the drivers of capacity reduction, maintaining a strategy of buying on dips.
Risk Warning: This information is based on publicly available data. While accuracy is strived for, no guarantee is made regarding its completeness or reliability. Trading based on this information is at one's own risk. This report does not constitute personal trading advice and may not consider individual client circumstances.
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