Protein Meal:
On Tuesday, CBOT soybeans closed higher, tracking gains in the corn and wheat markets. The upward movement was capped by the U.S. Department of Agriculture's anticipated increase in soybean acreage estimates and quarterly stockpiles. The USDA's Planting Intentions report estimated soybean acreage at 85.356 million acres, aligning closely with market forecasts and above last year's level. The quarterly stocks report estimated soybean inventories at 1.061 billion bushels, exceeding market expectations of 1.046 billion bushels. Weather forecasts indicated that high temperatures across most of the U.S. Midwest this week would pressure crop development, with some relief expected later. Domestically, commodities were broadly weaker, with the oil and meal sectors underperforming. Factors such as steady-to-lower import costs and ongoing supply pressure continued to weigh on protein meal prices, maintaining a weak and volatile trend.
Oils and Fats:
On Tuesday, BMD palm oil fell, dragged down by weakness in related markets. Shipping data projected Malaysia's palm oil exports for June to increase by 4.7% to 11.9% month-on-month. The Indonesian Palm Oil Association reported April exports of 2.78 million tonnes, also showing a year-on-year increase. Canola futures declined following official projections of a record planting area. Statistics Canada estimated canola acreage rose 8.4% to 23.4 million acres, surpassing the market's expected range of 22.1 to 23.0 million acres. Lower crude oil prices added further pressure to the vegetable oils complex. Domestic oils traded weakly, following the broader market lower. Declining import costs pushed price levels down, while slower spot transactions and ample supplies continued to suppress the market. Amidst macroeconomic pressures, prices are expected to remain weak and volatile.
Live Hogs:
On Tuesday, the September live hog futures contract initially rebounded before retreating. Over the weekend, higher prices for heavier hogs and a widening price gap between standard and heavy hogs provided a positive boost to the spot market, pushing prices up. However, after reaching a high on Monday, profit-taking and dominant short positions led to reduced open interest in the weighted contract, pressuring prices into a correction on Tuesday. The current national average price for live hogs is 9.74 yuan per kilogram, with the lowest price in Xinjiang at 8.57 yuan/kg and the highest in Fujian at 12.07 yuan/kg (excluding Hainan). Sample data from key breeding enterprises shows a daily slaughter volume of 290,085 head on June 29th, a decrease of 0.51% from the previous Friday. The average slaughter weight was 122.70 kg, slightly up from the prior day. Profits for self-breeding farms averaged a loss of 228.84 yuan per head, while farms purchasing piglets averaged a loss of 272.89 yuan per head. Technically, the rapid price increase in the September contract from last week into early this week was accompanied by rising open interest. However, Monday's positioning data showed dominant short positions, leading to a correction from highs and a reduction in the weighted contract's open interest.
Eggs:
On Tuesday, egg futures continued their strength, with the nearby contract hitting the daily limit up late in the session. The main August 2026 contract opened higher and gained 1.45% for the day, closing at 4,485 yuan per 500 kilograms. The September 2026 contract rose 1.05% to close at 4,438 yuan per 500 kilograms. In the spot market, data shows the national average egg price was stable at 4.02 yuan per jin. In producing regions, prices in Ningjin and Heishan were unchanged at 3.95 yuan/jin and 3.70 yuan/jin, respectively. In major consumption areas, prices in Puxi were stable at 4.22 yuan/jin, while Guangzhou saw a slight increase of 0.08 yuan/jin to 4.33 yuan/jin. Terminal demand varied, with most traders purchasing based on immediate needs, leading to generally stable prices with isolated adjustments. Latest data indicates the national laying hen inventory stood at 1.283 billion head as of June 30th, up 0.31% month-on-month. However, influenced by seasonal factors, the egg production rate declined to 91.61%, down 0.38 percentage points from the prior period. With spot prices stabilizing, futures have rebounded after finding a floor. Futures prices are currently showing greater strength than the spot market, potentially anticipating the seasonal price increase logic ahead of the peak demand period. Short-term focus remains on market sentiment and spot prices, while medium-to-long term attention should be on changes in breeding farm restocking and culling attitudes and their impact on supply.
Corn:
On Tuesday, open interest in the weighted corn contract continued to decline. As positions were reduced in the July contract and shifted to the September contract, the September futures price, which had risen over the previous two sessions, retreated in a downward oscillation. This rollover activity has been a recent market focus. Prices in Northeast China remain stable with inactive trading. Some grain in producing regions has slightly higher moisture content, and with rising July temperatures, there is potential selling pressure. However, some deep-processing plants have entered maintenance shutdowns, limiting demand, while port demand in the north is also subdued, resulting in relatively ample corn supply in the Northeast. Prices in North China are mostly stable with minor increases at a few processors. Recent rainy weather has impacted local trade. Traders are maintaining steady shipments based on processor pricing, but overall channel inventories remain high. Downstream companies continue to purchase based on immediate needs, with a cautious market sentiment and a wait-and-see attitude prevailing. The consumption region market is operating with stable prices and minor adjustments in some areas, with only sporadic transactions for rigid demand. Companies are prioritizing imports and low-priced sprouted wheat, leading to weaker corn consumption. Trade is sluggish, with the market expected to focus on rigid-demand negotiations in the short term. Technically, a significant increase in short positions in the September corn contract on Monday is pressuring further near-term gains. The September contract is approaching a resistance zone between 2,340 and 2,350, warranting caution for a potential price correction.
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