Soybean Meal: On Wednesday, CBOT soybeans showed little change as the market awaited signals from Chinese purchases and the U.S. soybean export sales report. The accelerated harvest of Brazilian soybeans is expected to result in exports exceeding 11 million tons in February, with a further increase anticipated in March, which helps secure global soybean supply but puts downward pressure on prices. Attention remains on the U.S.-India agreement and U.S. biodiesel policies. Domestically, soybean meal prices rose amid reduced positions. Higher U.S. soybean prices increased import costs, boosting domestic soybean meal markets. Additionally, concentrated exits by short positions ahead of the holiday contributed to the price increase. Spot market activity for soybean meal was subdued due to the holiday break, though basis levels remained firm. Trading strategy suggests short-term participation and exiting the 5-9 spread.
Vegetable Oils: On Wednesday, BMD palm oil closed lower due to bearish news from an industry conference. Multiple industry experts at the conference projected a downward trend in palm oil prices, citing ample supply and weak demand. Data indicated that Indonesia's palm oil stocks stood at 2.66 million tons at the end of December, while Malaysia's stocks were 2.82 million tons at the end of January. Shipping data showed a 10.5% to 14% decline in Malaysia's palm oil exports for February 1-10. Domestically, palm oil prices fell, while soybean oil and rapeseed oil prices held firm. Despite the supportive MPOB report, bearish sentiment from the industry conference led to continued declines in domestic palm oil. As markets enter the holiday period, spot market guidance for futures is limited. Price movements are closely tracking import costs, with ongoing attention to U.S. biodiesel policies, the U.S.-India agreement, and domestic oilseed procurement. Trading strategy recommends a short-term approach.
Live Hogs: On Wednesday, live hog futures rebounded from low levels. The main 2605 contract opened lower but continued to rise, closing up 0.74% at 11,155 yuan/ton. Zhuochuang data showed the average daily price for hogs in China at 11.4 yuan/kg, down 0.06 yuan/kg from the previous day. In the benchmark delivery region of Henan, the average price was 12.32 yuan/kg, up 0.26 yuan/kg. Prices were stable in Sichuan, Guangdong, and Shandong, but declined in Liaoning. Some regions saw active selling by farmers, while others showed a gradual reduction. Demand increased moderately, leading to mixed spot price movements. Given the extended Spring Festival holiday, attention will focus on changes in spot hog prices and movements in related international commodity prices, which may impact post-holiday futures.
Eggs: On Wednesday, egg futures saw moderate gains. The main 2603 contract traded sideways in the morning and edged higher in the afternoon, closing up 0.41% at 2,923 yuan/500 kg. Spot prices declined, with the national average egg price at 3.26 yuan/jin, down 0.09 yuan/jin. In production areas, Ningjin pink shell eggs held steady at 3.25 yuan/jin. In sales regions, Puxi brown shell eggs fell to 3.09 yuan/jin, while Guangzhou brown shell eggs remained unchanged at 3.5 yuan/jin. Short-term spot prices in production areas are expected to stabilize. Purchasing costs in sales regions are likely to hold steady, with downstream buyers maintaining cautious procurement. Due to price uncertainty during the holiday, light or neutral positions are advised. Market participants should monitor holiday demand and international commodity price movements for post-holiday direction.
Corn: On Wednesday, corn futures saw significant gains. The main 2605 contract rose with increased positions, breaking above the upper bound of its recent trading range, driven largely by macroeconomic factors and fund activity. This week, corn futures halted their decline and moved higher, influenced by gains in soybeans. Ahead of the holiday, positions shifted from the March contract to the May contract as spot markets paused for futures direction. Trading activity has slowed, with prices in Northeast China largely stable. Farmers showed limited selling interest, and purchasing by local drying facilities remained subdued, with some already halting operations. Pre-holiday trading in the Northeast has largely concluded, with minimal price adjustments. Deep processing plants in the region have suspended purchases for the holiday. In sales regions, corn prices saw narrow adjustments. Some port traders raised prices slightly, though overall market movement was limited. Downstream buyers remained cautious, with slow procurement and a focus on fulfilling existing orders. Overall, macro factors are guiding price direction as spot markets close for the holiday and futures see a rally. Technically, with the holiday approaching, fund flows are dominating short-term movements, suggesting a focus on short-term participation.
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