Soybean Meal: On Monday, CBOT soybeans retreated from a 21-month peak, ultimately closing with mixed results. Technical selling and profit-taking led to a decline in the nearby contract. Earlier, a sharp surge in crude oil prices had driven U.S. soybeans and soybean oil to new highs. However, overnight expectations of a potential end to the U.S.-Iran conflict caused crude oil to pull back, dragging down U.S. soybean product prices. Additionally, the market is awaiting the March WASDE report, with expectations of only minor adjustments. Domestically, soybean meal futures followed the upward trend in overseas markets, though trading sentiment remained cautious. The physical market was quiet. Although there are concerns about disruptions to soybean imports, ample domestic inventories have prevented the market from pricing in significant tightness around April. Downstream buyers are purchasing on an as-needed basis, maintaining a cautious approach. The upward momentum is currently concentrated in the futures market. Continued monitoring of developments in the Middle East is advised. Strategically, long positions should be exited.
Edible Oils: On Monday, BMD palm oil hit a 15-month high as the market anticipated that soaring crude oil prices would boost demand for biofuels, although it pared gains by the close. U.S. soybean oil prices retreated after reaching a new high, and canola declined, influenced by the pullback in crude oil amid expectations of a potential end to the U.S.-Iran conflict. Domestically, edible oils showed strength, with palm oil outperforming soybean oil and rapeseed oil. Driven by the continuous rise in crude oil, edible oils trended higher on optimistic biodiesel prospects. The impetus from rising import costs outweighed the impact of ample domestic supply. If the Middle East situation eases and crude oil prices decline, both domestic and international edible oil markets are expected to give back some gains. Strategically, maintaining long positions is recommended.
Live Hogs: On Monday, influenced by movements in related commodities, live hog futures opened higher but later retreated. The main 2605 contract closed at 11,200 yuan/ton, forming a long upper shadow. In the physical market, data showed the average daily price in China was 10.2 yuan/kg, down 0.08 yuan/kg from the previous day. The average price in the benchmark delivery region of Henan was 10.36 yuan/kg, a decrease of 0.22 yuan/kg. Declines were also observed in Sichuan, Liaoning, Guangdong, and Shandong. Producers are currently actively selling, with only sporadic secondary fattening and frozen product stockpiling occurring. Demand-side support remains insufficient, and the market is predominantly weak, though some regions saw slight price increases. Driven by the overall strength in the agricultural sector, hog futures surged in early trading but retreated during the session due to their inherently weak fundamentals. Short-term focus should be on market sentiment and supply-side influences on futures prices.
Eggs: On Monday, the main egg futures 2605 contract surged before pulling back, ultimately closing up 1.12% at 3,427 yuan/500 kg. In the physical market, the national average egg price was 3.04 yuan/jin, up 0.1 yuan/jin. In production areas, pink shell eggs in Ningjin were priced at 2.95 yuan/jin, up 0.1 yuan/jin, while brown shell eggs in Heishan were 2.9 yuan/jin, also up 0.1 yuan/jin. In consumption areas, brown shell eggs in Puxi held steady at 3.13 yuan/jin, while prices in Guangzhou rose 0.1 yuan/jin to 3.4 yuan/jin. Short-term prices in production areas may stabilize or increase slightly, with rising costs in consumption areas contributing to a rebound in spot egg prices. The underlying weak supply-demand dynamic remains unchanged, suggesting a continuation of range-bound movement. However, influenced by macroeconomic factors and related commodities, futures prices show relative strength. Short-term trading is advised, with ongoing attention to supply data impacting spot prices and monitoring of related commodity price movements and market sentiment for futures.
Corn: On Monday, influenced by significant volatility in related commodities driven by crude oil, corn futures prices rose initially before falling. The main contract closed with a small positive candle featuring a long upper shadow. In the physical market, prices in Northeast China remained firm, with weekend purchase prices at northern ports still rising. Deep processing plants in production areas showed strong restocking interest. In North China, corn prices were steady to weak over the weekend. After previous sustained price increases and the dissipation of weather-related disruptions, traders became more willing to sell, leading to increased arrivals at deep processing plants. Some plants slightly lowered their purchase prices, but the adjustments were limited. Prices in consumption areas remained firm over the weekend, supported by rising prices in production areas, logistics costs, and essential restocking demand, although the pace of increases slowed compared to earlier. Overall, the main corn contract saw a reduction in open interest and adjusted on Monday, experiencing a significant rally driven by related commodities. However, open interest declined during the session, and prices retreated from intraday highs, with the May contract falling back to the 2,400 yuan psychological level. Technically, for the May contract, long positions near 2,400 should consider implementing dynamic profit-taking stops alongside protective put options.
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