On Monday, CBOT soybeans declined, pressured by lower crude oil prices. Soybean meal futures also fell, while soybean oil prices moved higher. The Strait of Hormuz remained open to shipping, alleviating prior market concerns over supply disruptions. Weather conditions in the U.S. soybean belt are favorable, supporting crop development. The post-market crop progress report indicated a soybean good-to-excellent rating of 66%, aligning with market expectations. The emergence rate reached 93% and the blooming rate was 9%, both figures exceeding the levels from last year and the five-year average. Domestically, protein meal futures traded within a narrow range, largely following the movement of import costs. Spot market activity was subdued, with participants adopting a wait-and-see approach. Data from MySteel shows that soybean inventories increased last week, as did soymeal stocks, while the volume of unfulfilled contracts declined.
Oilseeds and Oils
On Monday, BMD palm oil futures advanced, reaching a three-week high. Shipping data indicated that Malaysian palm oil exports for June 1-20 increased by 25% to 78.53% compared to the previous period. This improved export performance provided a boost to the market. Canola futures in Canada also rose, supported by technical corrections. Heavy rainfall has affected much of Western Canada over the past two weeks, which may cause sellers to remain cautious. In domestic markets, oilseed and oil futures exhibited choppy trading with light volume. The market is currently grappling with a mix of bullish and bearish factors, where macroeconomic conditions and fundamental supply-demand dynamics are intertwined. Attention is focused on capital flow movements. MySteel data revealed that commercial inventories for the three major domestic oils increased week-on-week but decreased year-on-year last week, with soybean oil stocks facing the most significant accumulation pressure.
Live Hogs
On Monday, nearby live hog futures contracts faced downward pressure, while the main September 2609 contract held steady. The primary contract continued its pattern of low-level consolidation. In the Heilongjiang market, the mainstream transaction price for live hogs was 9.16 yuan per kilogram, down 0.02 yuan from the previous day. The Jilin market saw a mainstream price of 9.28 yuan/kg, a decrease of 0.04 yuan. Prices in Liaoning remained flat at 9.45 yuan/kg, as did those in Inner Mongolia at 9.38 yuan/kg. The average ex-farm price in Guangdong was slightly higher at 10.53 yuan/kg, with large-scale farms quoting between 10.2 and 11.00 yuan/kg. The Guangxi market average declined to 9.29 yuan/kg, with large-scale farm quotes ranging from 9.2 to 9.7 yuan/kg. Technically, following three consecutive days of declines last week, market sentiment for the September hog contract has turned pessimistic, suggesting a short-term trend of weak consolidation.
Eggs
On Monday, egg futures continued their decline. The main August 2608 contract fell 3.74% to close at 4,345 yuan per 500 kilograms, while a nearby contract hit the daily limit-down. In the spot market, data from Zhuochuang showed the national average egg price at 4.43 yuan per jin, down 0.08 yuan from the previous day. In production areas, Ningjin's pink-shell egg price was 4.3 yuan/jin (down 0.1 yuan), and Heishan's brown-shell egg price was 4.3 yuan/jin (down 0.1 yuan). In consumption areas, Puxi's brown-shell egg price was 4.69 yuan/jin (down 0.11 yuan), and Guangzhou's was 4.75 yuan/jin (down 0.1 yuan). Prices in production areas are mostly declining, and procurement costs in consumption areas are also falling. With downstream demand remaining lackluster, spot egg prices are expected to continue their downward trend. The plum rain season is unfavorable for egg storage, and the seasonal demand lull may further pressure future prices. However, from a technical perspective, after two days of sharp declines, the downside for egg futures appears limited in the near term. It is suggested that short positions consider taking profits and exiting, adopting a wait-and-see stance for now. Investors may look for potential long opportunities during the third-quarter peak season once the market stabilizes. Short-term focus should be on market sentiment and spot price movements, while the medium to long-term outlook hinges on changes in breeding farm restocking and culling attitudes, which will impact future supply.
Corn
On Monday, the main corn September 2609 contract initially rose before falling back, closing with a small bearish candlestick featuring a long upper shadow, indicating continued consolidation. During the holiday period, corn prices at northern ports remained largely stable. Arrivals of trucks were limited, and trading activity remained subdued. Downstream enterprises and corn deep-processing plants showed only modest purchasing interest, with grain from Northeast China finding limited sales channels. It is anticipated that Northeast corn prices may continue to face headwinds in the short term. In North China, corn prices fluctuated within a narrow range. Activity at the grassroots level in buying and selling remained low, with a strong wait-and-see sentiment prevailing. Arrivals at deep-processing plants were uneven, leading companies to make minor price adjustments based on their individual situations. Market participants are monitoring the pace of trader shipments and the release of policy grain reserves. In consumption areas, corn price quotes were confined within a tight range, with overall trading quiet. Traders are primarily observing the market, receiving goods in small, staggered batches without building long-term inventory, allowing for slight price negotiations. Feed mills are prioritizing wheat and imported grains in their formulations, maintaining only minimal safety stock levels of corn and purchasing at pressured prices. Technically, stable spot corn quotes, coupled with the main contract's reversal from gains to losses, have dampened bullish expectations. The aggregate open interest for corn contracts has dropped from 2.2 million to 1.75 million lots, indicating speculative capital is exiting the market. With neither bulls nor bears holding a dominant position, futures prices are expected to maintain a weak, consolidating pattern.
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