Soybean Meal: On Monday, CBOT soybeans declined, retreating from a four-week high due to profit-taking. Both soybean meal and soybean oil futures also fell. The U.S. soybean export inspection report showed weekly inspections of 1.324 million metric tons, aligning with market expectations. Inspections destined for China during the week accounted for 897,000 metric tons, representing 67.76% of the total. Brazil's 25/26 crop production is forecast to reach 181 million metric tons, exceeding the previous estimate of 180.4 million metric tons. Additionally, institutions estimate that 4.9% of the crop has been harvested, slightly higher than the 3.9% recorded last year. The market is monitoring the harvest progress alongside the hot and dry weather conditions in Rio Grande do Sul. Domestically, soybean meal prices continued to rise, following a broad-based uptrend in commodity markets. As the Spring Festival approaches, restocking demand from downstream users is supporting the price increase. Some crushers are experiencing truck queues, indicating that physical inventories downstream are gradually building. The interplay between futures and spot markets is driving prices into a stronger, oscillating pattern. Strategically, a short strangle is recommended.
Edible Oils: On Monday, BMD palm oil closed higher, tracking gains in related markets. Escalating tensions concerning Iran pushed crude oil prices upward. High-frequency data indicated that Malaysia's palm oil exports for January 1-25 increased by 7.97% to 9.97% compared to the previous month. MPOA estimated that Malaysian palm oil production for January 1-20 declined by 14.43% month-on-month. Canola futures in Canada fell, erasing last week's gains, as market expectations for Canadian canola exports shifted from prior optimism to current caution. In the domestic market, edible oils collectively advanced, with palm oil hitting a three-month high, soybean oil reaching a five-month peak, and rapeseed oil climbing to a six-week high. Rising international crude oil prices and the broad rally in commodities fostered optimistic sentiment. A shift in expectations regarding the feasibility of importing Canadian canola prompted gains in the rapeseed complex. Improved Malaysian palm oil export data drove up prices at the origin, subsequently pulling domestic palm oil prices higher. Domestic edible oil inventories are being drawn down, with spot demand continuing to be released. Strategically, selling put options is suggested.
Live Hogs: On Monday, live hog futures traded with a weak, oscillating bias. The main 2603 contract closed down 0.86% for the day at 11,465 yuan/ton. Data from SCI99 showed that China's average daily hog price yesterday was 12.82 yuan/kg, down 0.04 yuan/kg from the previous day. The average price in the benchmark delivery region of Henan was 13.1 yuan/kg, falling 0.16 yuan/kg. Prices rose in Sichuan and Shandong, held steady in Guangdong, and declined in Liaoning. In northern regions, producers were actively releasing hogs, while post-holiday restocking demand from consumers tapered off, leading to price declines under the influence of oversupply. Demand in southern markets was generally flat; however, producers there showed reluctance to sell at lower prices, creating a stalemate between supply and demand that kept prices largely stable, with minor declines in some areas. From a medium- to long-term perspective, the overall breeding herd inventory remains on a downward trend. Nevertheless, in the short term, as Spring Festival restocking nears completion, the supportive effect of peak seasonal demand on hog prices is waning, increasing the possibility of a price correction. Maintaining a short-term trading approach is recommended, while closely monitoring capital flows and shifts in market sentiment.
Eggs: On Monday, the main egg futures 2603 contract rebounded intraday before retreating, ultimately closing up 0.76% at 3,069 yuan/500 kilograms. In the spot market, SCI99 data indicated the national average egg price yesterday was 3.86 yuan/jin, unchanged from the previous day. In producing areas, pink-shell egg prices in Ningjin held at 3.9 yuan/jin, while brown-shell egg prices in Heishan market remained at 3.5 yuan/jin. In consumption areas, brown-shell egg prices in Puxi were steady at 4.07 yuan/jin, and prices in the Guangzhou market were unchanged at 3.98 yuan/jin. Terminal consumption varied, with most traders purchasing based on immediate needs. Egg prices in major consumption markets were mostly stable, with isolated instances of increases. In the short term, pre-holiday restocking continues to provide support for spot prices. However, from a medium- to long-term view, as breeding profits recover, producers' willingness to replenish flocks is increasing while their willingness to cull older hens is decreasing, which is unfavorable for reducing production capacity. If this trend persists, supply will continue to exert downward pressure on egg prices. It is advisable to dynamically take profits on existing long positions. Attention should be paid to changes in producers' culling and replenishment intentions and their impact on future supply, as well as the influence of capital and sentiment on the futures market.
Corn: On Monday, the main corn 2603 contract tested resistance at the key 2,300 yuan psychological level before trending downward. Pressured by the decline in the March contract, the May and July corn contracts also underwent adjustments. Over the weekend, corn prices in northern ports showed slight strength, with truck arrivals at ports increasing. Mainstream purchase prices at deep-processors in Northeast China remained stable for the time being, with deliveries also relatively high; from a spot perspective, the market in the Northeast maintained a stable-to-slightly-firm tone. Corn prices in North China overall held steady over the weekend, with only a few enterprises making narrow price adjustments. The market has once again reached a relative supply-demand balance, with grassroots buying and selling activity relatively calm, and downstream enterprises facing limited pressure for pre-holiday restocking. Corn prices in consumption area markets remained firm over the weekend. Downstream pre-holiday restocking is nearing its end, leading to more cautious procurement. Technically, for the main contract, continued focus is warranted on price action around the 2,300 yuan integer关口. Short-term long positions should consider setting dynamic profit-taking stops, while the medium-term outlook remains one of oscillating strength.
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