Everbright Futures provides its daily market analysis for the agricultural sector on June 25th.
Protein Meals:
On Wednesday, CBOT soybeans closed lower as investors adjusted positions. Falling crude oil prices and a stronger US dollar weighed on commodity prices. Net US soybean export sales are estimated between 550,000 and 1.5 million metric tons, with the market awaiting the official report results on Thursday evening. Domestically, protein meal prices moved within a range, tracking import cost fluctuations. Spot market activity was light, with participants also adopting a wait-and-see approach. Data from MySteel shows that soybean inventories rose last week, as did soymeal inventories, while unfulfilled contracts declined. Rapeseed meal gains outpaced those of soymeal. Despite increased arrivals of Canadian canola, the resilience of demand during the peak aquaculture consumption season has prevented rapeseed meal inventories from accumulating, with some local markets even remaining tight.
Oils and Fats:
On Wednesday, BMD palm oil fell for a second consecutive day, following declines in related markets. The widening drop in crude oil prices negatively impacted the biodiesel consumption outlook for vegetable oils. MPOA data indicates Malaysian crude palm oil production for June 1-20 increased by 4.76% month-on-month, while exports for the same period rose between 19.1% and 25% month-on-month. Based on this, Malaysia faces low inventory accumulation pressure in June. Indonesia is set to implement its B50 biodiesel policy on July 1st, increasing producers' willingness to support prices. Canola prices in Canada closed lower, dragged down by weak crude oil. Domestically, oils and fats traded within a range, with palm oil showing relative weakness while rapeseed oil and soybean oil were relatively stronger. Domestic consumption of oils and fats remains sluggish, particularly for palm oil, leading to weaker domestic price performance compared to the international market. With mixed bullish and bearish factors, the market is expected to continue its range-bound movement.
Live Hogs:
On Wednesday, live hog futures saw increased positions and rose. On the day, open interest declined for the nearby July 2026 and September 2026 contracts but increased for the deferred November 2026 and January 2027 contracts, with prices for the September and November contracts moving higher in tandem. In the spot market, quotations for fattened hogs increased, widening the price gap between standard and fat hogs, indicating improved sentiment. Industry surveys show that prices for large hogs have been rising recently, leading to a clear divergence in views within the sector. Some industry participants are optimistic about the upward trend and plan to enter the market for secondary fattening, while others maintain a cautious stance, believing the fundamental issue of oversupply has not been resolved. Listed hog enterprises reduced their slaughter volume in May, with a further decrease anticipated for June. Major scaled farms have recently continued to lower their slaughter weights, while slaughter weights for smallholders have simultaneously increased, suggesting enhanced selling enthusiasm among smallholders currently, providing some short-term supply supplementation to the market. Technically, following three consecutive days of declines last week for the September hog contract, market sentiment turned pessimistic. This week, hog futures have stabilized and rebounded. The widening standard-fat hog price gap and increased open interest in the weighted hog contracts suggest that whether the price rally can be sustained requires continued monitoring.
Eggs:
On Wednesday, nearby egg futures contracts rebounded. The main August 2026 contract traded within a range in the morning before trending upward in the afternoon, closing up 1.55% at 4,446 yuan per 500 kilograms. On the spot side, data from Zhuochuang shows the national average egg price yesterday was 4.29 yuan per jin, down 0.05 yuan from the previous day. In production areas, pink-shell eggs in Ningjin were quoted at 4.2 yuan/jin, flat day-on-day, while brown-shell eggs in Heishan were at 4.1 yuan/jin, down 0.1 yuan. In consumption areas, brown-shell eggs in Puxi were at 4.51 yuan/jin, down 0.07 yuan, and brown-shell eggs in Guangzhou were at 4.6 yuan/jin, down 0.05 yuan. Traders are purchasing and selling as needed. Arrivals at consumption area markets decreased compared to the previous day. Spot prices continued to correct, though the pace of decline narrowed. After experiencing significant corrections over two consecutive trading sessions, egg futures prices have stabilized and rebounded. Following this risk release, eggs may resume a relatively strong, range-bound pattern. In the short term, focus is on market sentiment and spot prices. In the medium to long term, attention turns to changes in restocking and culling attitudes among breeders and their impact on supply.
Corn:
On Wednesday, the main September 2026 corn contract traded within a range and closed slightly higher. The contract closed with a small bearish candlestick featuring a long upper shadow on Monday, followed by mixed price movements over the next two trading sessions, indicating choppy performance. Currently, corn prices in Northeast China are largely stable. With ample alternative grain supplies still available, the Northeast market lacks a catalyst for a significant breakout. Deep processing plants are entering maintenance shutdowns, and corporate purchasing momentum is not strong. Without improvement in transactions, Northeast corn prices are likely to remain relatively stable, making a substantial upward breakthrough difficult. Corn prices in North China remain relatively stable within a range, with companies making minor price adjustments based on their own situations, maintaining a relative balance between supply and demand. Corn quotations in consumption areas are generally stable to slightly weak, with substitutes continuing to suppress demand. Port arrivals and shipments are weak. Traders are selling based on market conditions, downstream procurement has slowed, with only small amounts purchased to meet immediate needs. Price movement in either direction is limited, making a clear trend unlikely in the short term. Overall, with policies regarding substitute supply in the corn market being implemented and the conflict between bullish and bearish factors being realized, open interest in the weighted contracts has declined, and futures prices are trending weakly within a range.
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