Corn: Neutral 1. Market Performance: The corn 05 contract closed at 2,322 yuan per ton yesterday, with a daily increase of 0.13%. Trading activity remained subdued due to the Spring Festival holiday, leading to a brief pre-holiday uptick in both futures and spot prices. 2. Downstream Demand: Deep processing enterprises have successively issued notices to suspend or reduce purchases, as pre-holiday restocking is largely complete. Feed enterprises are primarily fulfilling existing contracts, showing weak purchasing interest. 3. Market Focus & Summary: Post-holiday market divergence centers on whether grain stocks in Northeast China will see concentrated sales following rising temperatures, and the actual demand elasticity of enterprise inventories in this context. The corn 03 contract is expected to fluctuate within the 2,250–2,275 yuan/ton range before the holiday, with directional trends awaiting confirmation from post-holiday supply releases and demand recovery.
Soybean Meal: Neutral 1. Overseas markets continue to assess potential upward revisions to U.S. soybean demand for the 2025/26 season, with CBOT soybeans closing higher overnight. Short-term U.S. market focus revolves around three themes: A. The pace of Brazil's new crop harvest and rainfall changes in Argentina; B. Progress in new sales orders to China; C. Signs of substantive expansion in crushing capacity. 2. Forecasts indicate improved rainfall (50-65 mm weekly) may arrive in north-central Argentina over the next week, while Buenos Aires province remains relatively dry. Although declining crop conditions (latest at 32%, above last year's 18%) reflect negative impacts from dry heat, the Rosario Grain Exchange raised its soybean production estimate to 48 million tons (prev. 47 million), noting that rainfall in the next 10-15 days will determine whether yields avoid downward revisions. In Brazil, Conab noted that persistent rains in the central-north have disrupted harvesting but not significantly affected soybean quality. 3. Dalian soybean meal futures followed U.S. markets higher in the short term, with some short positions covering due to concerns about amplified volatility from South American weather risks during the holiday. Post-holiday attention will focus on March soybean arrivals and reserve auction patterns. Summary: Adopt a wait-and-see approach pre-holiday, monitoring the 05 contract's performance near 2,850 yuan/ton.
Eggs: Neutral to Slightly Bullish Spot quotations across channels have paused ahead of the Spring Festival. Following the realization of weak near-term fundamentals, both distant and nearby futures contracts have risen, with the 05 and 06 contracts posting significant gains. Recent spot price declines have gradually narrowed the basis. The current convergence has primarily occurred through spot price decreases, with the 03 contract's price largely reflecting support near cost levels, leaving limited room for further declines. However, if post-holiday inventory pressure exceeds expectations or demand recovery is unusually slow, excessive spot price drops could drive the 03 contract lower. Trading Strategy: Distant contracts like 2605 and 2606 may hold long positioning value after basis convergence. Spread strategies could focus on opportunities arising from widening 6-8 price differentials.
Live Hogs: Neutral The average price in major production regions was approximately 11.52 yuan/kg yesterday. Secondary finishing hog sales have increased. Prices faced renewed pressure after a seasonal pre-holiday rebound. Concentrated pre-holiday sales by breeding enterprises created significant supply pressure, while consumption support fell short of expectations. Sample enterprises tracked by Yongyi plan to sell 22.92 million head in February, down 17.73% from January's actual sales. Adjusted for fewer selling days due to the holiday, daily sales increased 21.44% month-over-month. Although volatility remains possible near the holiday, nearby futures contracts have largely priced in downward expectations, with high basis levels reflecting anticipated price declines. Trading Strategy: Nearby contracts show relative weakness, while distant contract premiums have narrowed amid diverging views. Short-term focus may center on spread strategies.
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