Corn: Neutral to Bullish 1. Market Focus: There is a maximum limit for wheat/rice feed substitution. The market has gradually digested bearish news related to relevant auctions, leading to a rebound in futures after a phase of bearish exhaustion. However, the extent of this rally is limited. The feed use of soybean meal/corn is gradually approaching a physical safety cushion. Some deep-processing quotations have begun to adjust downward. New-season and old-crop wheat prices continue to decline, and feed enterprises may adjust substitution ratios close to the theoretical upper limit. The USDA's new-season assessment is neutral to bullish, projecting that U.S. and global corn ending stocks will fall to multi-year lows. The supply-demand structure is expected to tighten further compared to the current year, with the price center shifting higher year-on-year. The expectation of a stronger corn market remains unchanged, but it should be noted that increased production in South America partially offsets the tightening in the U.S., meaning the upward price trajectory will not be a smooth, unilateral rally. 2. View Summary: The futures market has seen a correction following the digestion of bearish factors, and the corresponding spot price decline in the previous round was limited. Industry and channel players maintain ample confidence, but grain pressure persists. Consider testing long positions at lower levels.
Soybean Meal: Neutral 1. Technical bargain-hunting combined with heightened geopolitical risks led to an overnight rebound in CBOT soybeans. World Ag Weather forecasts indicate favorable precipitation and temperature conditions in U.S. soybean-producing regions over the next week, generally conducive to soybean planting progress and early emergence. The latest ENSO monthly report predicts an 82% probability of an El Niño event occurring from May to July, likely persisting throughout the Northern Hemisphere winter. For the period from November 2026 to January 2027, the probability of a strong/super-strong El Niño event is 30% and nearly 40%, respectively. 2. Dalian soybean meal futures are primarily following the movement of U.S. markets in the short term. Expectations of new U.S. soybean purchases by China have been temporarily disproven. This, on one hand, pressures the valuation of Dalian soybean meal through a lower U.S. market center, and on the other hand, may raise CNF quotations for Brazilian soybeans in the near term. View Summary: The rebound in U.S. markets is expected to help Dalian soybean meal futures halt their decline. Intraday focus will be on the performance of the September soybean meal contract within the 2950-3050 yuan/ton range.
Eggs: Neutral Spot prices in major producing areas are fluctuating at high levels. The spot quotation in Guantao, Hebei is 4.33 yuan/jin, up 0.06 yuan/jin from the previous day. Currently, spot prices in main producing areas continue to rise, reaching annual highs within the range of 4.3–4.5 yuan/jin, marking a new high over the past year. Concurrently, production and circulation inventories in the market remain low, indicating a noticeably tight supply situation. This suggests the current spot price increase is not driven by channel stockpiling logic, making this round of market activity relatively healthy. Recent noteworthy developments include: 1) Breeding profits have reached their highest level in nearly five years for the same period, with static breeding profit this week at +1.05 yuan/jin, up 0.29 yuan/jin week-on-week; 2) The culling age has increased again, reaching 518 days this week, up 4 days week-on-week, indicating a further intensification of delayed culling. From the perspective of marginal changes in fundamentals, the positive feedback from rising spot prices is strengthening producers' willingness to delay culling and hold back supply. View Summary: Near-month contracts are primarily driven by basis convergence in the short term. Considering the strengthening sentiment for delayed culling and the potential for concentrated release of new production capacity after June-July, consider positioning for short positions on rallies in distant months, anticipating pressure from capacity release.
Live Hogs: Neutral to Bearish Live hog spot prices are fluctuating. The average spot price in major producing areas yesterday was 9.59 yuan/kg, up 0.03 yuan/kg from the previous day. On May 14, the Ministry of Agriculture and Rural Affairs released a new version of the "Comprehensive Hog Production Capacity Regulation Implementation Plan," lowering the normal inventory of breeding sows to 37.5 million head. The futures market structure has shown significant divergence, featuring a pattern of near-month weakness and distant-month strength. This reflects market expectations for policy regulation in stages, and the distant-month premium driven by these expectations requires further validation from future data on capacity reduction. Guidance from the latest piglet data indicates that newborn piglet numbers in April increased by 0.7% month-on-month. Despite a significant drop in spot prices in April, the number of newborn piglets rose month-on-month, reflecting the industry's strong counter-cyclical resilience and the current difficulty for market forces to drive capacity reduction. View Summary: For near months, focus on range-bound trading. Distant months, due to their higher premium, face short-term adjustment pressure. Medium to long term, consider building long positions in distant months on dips, relying on support at lower range levels.
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