Commodity markets presented a mixed picture on Thursday, with trading activity influenced by weather forecasts and position adjustments ahead of the US holiday weekend. The US market will be closed on Friday in observance of Independence Day.
Protein Meal
CBOT soybeans closed with varied results, influenced by expectations of favorable weather conditions in key US growing regions and traders squaring positions. Soybean meal futures advanced, while soybean oil prices retreated. Updated weather forecasts indicate that beneficial rainfall is expected across the soybean belt, alleviating some crop concerns. The weekly export sales report showed net soybean sales of 224,000 tonnes, falling short of market expectations. In domestic Chinese markets, spot soybean meal prices saw localised increases, with nearby basis levels holding steady. End-users engaged in some restocking at lower price levels, supporting decent trading volumes. Futures are likely to continue their range-bound trend, with close attention on weather developments in the US and the pace of soybean meal inventory accumulation domestically.
Vegetable Oils
BMD palm oil futures declined, pressured by expectations of rising production and a lack of signs pointing to a recovery in export demand. Weaker crude oil prices also diminished the appeal of vegetable oils for biodiesel consumption. Traders noted that India's palm oil imports in June dropped to a 14-month low, attributed to sluggish demand and a narrowing discount for palm oil against competing oils. Canola futures in Canada were mixed as investors adjusted positions. Domestic Chinese oil markets traded with a weak bias, weighed down by soft crude oil prices and increased planting area estimates for US soybeans and Canadian canola. The market continues to monitor weather conditions in both overseas and domestic oilseed regions to further gauge production prospects. With no dominant market theme, the sector is caught between near-term oversupply pressures and longer-term supportive expectations, suggesting a continuation of the current volatile, range-bound pattern.
Live Hogs
Live hog futures experienced minor adjustments on Thursday. The main September 2026 contract closed down 0.12% at 12,255 yuan per tonne. Spot market data indicates the national average price for hogs rose slightly by 0.08 yuan to 10.44 yuan per kilogram. Prices in the benchmark delivery region of Henan remained stable at 10.26 yuan/kg, with increases noted in Sichuan, Liaoning, and Guangdong, while Shandong prices were flat. Supply of heavier-weight hogs remains relatively tight, supporting the price uptrend. However, the price increase has prompted some farms to slightly raise their selling plans, and enthusiasm for secondary fattening has cooled. Slaughterhouses have shown limited buying interest, causing the pace of price gains to slow. From a fundamental perspective, the overall ample supply situation is likely to continue influencing the market.
Eggs
Egg futures saw gains on Thursday. The main August 2026 contract rose 1.25% to close at 4,524 yuan per 500 kilograms. The September 2026 contract, after an early rally, pared some gains to close up 0.16% at 4,403 yuan. Spot egg prices firmed, with the national average increasing by 0.11 yuan to 4.22 yuan per jin. Following the price stabilisation and rebound, most traders have engaged in normal buying and selling, supporting the continued upward movement in spot prices. Current supply-side dynamics are expected to continue providing support for egg prices. Looking ahead, as southern China exits the rainy season and enters the traditional peak demand period later in the year, a cautiously optimistic outlook for prices is maintained. Market focus remains on the impact of older hen culling, the influence of cold storage egg supplies on spot prices, and overall market sentiment.
Corn
Corn futures exhibited narrow-range fluctuations this week. Open interest in the weighted contract has declined recently, with funds rolling out of the July contract and into September. The September contract saw a two-day rally last Friday and Monday but has since trended lower, making the rollover activity a focal point. In Northeast China, corn offers appear stable, though actual transaction prices are slightly below these offers, and shipment volumes have not improved. Ample supplies from policy-related sales and relatively low wheat prices have limited demand and underpinning for corn. In North China, channel inventories remain high. After recent price increases, shipments are expected to gradually increase, with some Shandong processors slightly lowering purchase prices this morning. Overall, supply and demand in the North China market remain relatively balanced. Prices in consumption areas are stable to slightly weak with minor fluctuations. Arrivals at southern ports are moderate, but overall inventories of imported grains are high, ensuring ample supply and limiting upward price momentum. Feed mills maintain low inventory levels with minimal bulk forward purchasing, opting instead for daily spot purchases. Downstream consumers indicate that conditions for a corn price increase are not currently present. Short-term attention is on the pace of trader sales, changes in wheat prices, and the rhythm of policy-related grain releases. Technically, open interest in the weighted corn contract has fallen to 1.64 million lots as both longs and shorts reduce positions, leading to a consolidative price pattern. Industry expectations suggest that with ample supplies of substitutes, corn futures are likely to exhibit a weak, range-bound trend in July.
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