Protein Meal and Oilseeds
On Monday, CBOT soybeans plunged 3% due to a sharp drop in crude oil prices and profit-taking by investors. Both soybean meal and soybean oil fell, with declines exceeding 3%. International crude oil plummeted nearly 9% after the US and Iran reached a ceasefire agreement over the weekend, boosting confidence in a negotiated peace deal and causing the energy and chemical sectors to lose their premium, dragging oilseeds and meals lower. The US Department of Agriculture reported private sales of 126,000 tonnes of soybeans to unknown destinations for delivery in the 2026/27 season. The export inspection report showed weekly inspections of 349,000 tonnes, within the expected range. Post-market crop reports indicated that the US soybean good-to-excellent rate fell to 63%, below the market expectation of 64%.
Domestically, protein meal prices followed the trend of import costs, with the external market weakness triggering a domestic decline. Soybean meal remains in a stock-building trend, with the market's focus on the interplay between rising crude oil prices and higher import costs. The market continues to monitor weather conditions in producing regions and the pace of domestic protein meal stock accumulation.
Vegetable Oils and Fats
On Monday, BMD palm oil fell over 1%, tracking the weakness in broader markets. However, strong demand helped limit the decline. High-frequency data showed that Malaysian palm oil exports for July 1-25 increased by 8.1% to 15.9% month-on-month. Canadian canola closed lower, falling over 4%, as the relative easing of tensions in the Middle East raised hopes for a lasting ceasefire, dragging crude oil prices down sharply. Canola crops are generally growing well, with temperatures not yet reaching extreme heat levels.
Domestically, vegetable oils fluctuated with external markets. The nearly 9% plunge in international crude oil, driven by the US-Iran ceasefire agreement over the weekend, strengthened confidence in a negotiated peace deal, causing the energy and chemical sectors to shed their risk premium, with oilseeds and meals following suit. The domestic and international edible oil markets are in the off-season for consumption, with high temperatures further dampening demand, limiting the ability to absorb supply. The turning point for domestic and international oil and fat stock levels remains unclear. The vegetable oil market is expected to fluctuate with a firm bias. The market will continue to focus on shipping conditions in the Strait of Hormuz and edible oil consumption trends.
Live Hogs and Pigs
On Monday, live hog futures, with the main 2609 contract, opened lower and then rebounded during the day, closing up 0.99% at 11,175 yuan per tonne. In the spot market, data from Zhuochuang showed that the national average live hog price was 10.32 yuan per kg yesterday, down 0.08 yuan per kg from the previous day. The benchmark price in Henan, the benchmark delivery area, was 10.6 yuan per kg, down 0.02 yuan per kg. Prices were stable in Shandong, while they fell in Guangdong, Sichuan, and Liaoning. Demand remains weak, with high temperatures and school holidays negatively impacting pork consumption. Additionally, the pace of monthly slaughtering plans by breeding farms has been slow, providing limited support for hog prices, which have come under pressure. As the weather cools later in the year, demand is expected to recover, combined with improved supply from declining production capacity, likely leading to a price rebound. However, given that the number of breeding sows has not yet fallen below the normal reserve level, the rebound is expected to be relatively weak. In the short term, futures prices, after falling to lower levels, have stabilized and rebounded slightly.
Eggs
On Monday, egg futures fluctuated, with the main 2609 contract closing up 1.57% at 4,085 yuan per 500 kg, and the 2608 contract closing up 2.59%. In the spot market, data from Zhuochuang showed that the national average egg price was 4.57 yuan per jin, unchanged from the previous day. In producing areas, the price of shell eggs in Ningjin was 4.5 yuan per jin, and in Heishan, the price of brown-shell eggs was 4.2 yuan per jin, both unchanged. In consuming areas, the price of brown-shell eggs in Puxi was 4.8 yuan per jin, and in the Guangzhou market, the price of brown-shell eggs was 4.8 yuan per jin, both unchanged. Most traders are purchasing based on immediate sales, with prices in consuming areas being mostly stable or slightly lower. After a continued correction, futures prices have rebounded slightly. The market will monitor the impact of demand on spot prices and market sentiment on futures prices.
Corn
On Monday, corn futures traded in a narrow range. Over the weekend, corn prices in Northeast China were generally weak, with deep processing plants continuing to lower their purchase prices, showing generally moderate purchasing enthusiasm. The surplus of old crop corn in producing areas is higher than last year. Given grain quality and funding issues, traders are generally willing to sell, but market demand is sluggish, leading to a weakening trend. Over the weekend, corn prices in North China were stable to firm. After a period of continuous decline, supply pressure has gradually eased, with deep processing plants seeing low arrivals at their gates. Some plants have slightly raised corn prices by 10-20 yuan per tonne. In consuming areas, corn prices lack positive drivers, maintaining a weak and volatile trend. The cost of supply from producing areas has softened, traders' willingness to sell has increased, and downstream demand remains limited to immediate needs, with low willingness to build inventory. Substitutes continue to divert demand, with clear regional differentiation, and many market participants are selling at a discount. The corn market lacks clear positive catalysts, and the impact of weather on the market is also limited. Prices are expected to maintain a stable to slightly weak trend in the short term. Overall, the corn market in July and August faces a mix of bullish and bearish factors from substitutes and weather. El Niño drought conditions provide price support for US grain, but have limited impact domestically, with futures prices showing a range-bound trend.
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