This report provides an overview of the key movements and outlook for major agricultural commodity futures.
Protein Meals
CBOT soybeans closed lower on Tuesday, pressured by favorable U.S. weather forecasts that boosted yield prospects. Additionally, slower-than-usual Chinese purchases weighed on the market. The latest crop progress report indicated U.S. soybean planting is 87% complete, with 66% of the crop rated in good-to-excellent condition. Domestically, protein meal prices were range-bound. Basis offers for U.S. and Brazilian soybeans were steady to firmer, resulting in only a slight decline in global soybean import costs. Soybean crush volumes exceeded 2 million tonnes last week, leading to a rise in soybean inventories and a confirmed inflection point for soymeal stocks. There are no immediate supply concerns for domestic soymeal, with import costs finding a higher floor. The trading strategy suggests a cautious, short-term long approach.
Vegetable Oils
BMD palm oil was closed for trading on Tuesday, with markets reopening on Wednesday. Reports indicate India's palm oil imports saw a slight recovery in May, while soybean oil imports surged significantly, as palm oil's price competitiveness remained weak. Canola futures were mixed, supported by slow progress in new-crop planting. Official data shows that as of May 25th, seeding progress in Saskatchewan was 38%, 60.9% in Alberta, and less than half in Manitoba, indicating a delayed pace. Domestically, vegetable oil prices edged higher. Despite ample spot supplies, palm oil prices were supported by firm offers from producing regions, influenced by Malaysia's implementation of its B15 biodiesel mandate and Indonesia's management of palm oil supplies. Stronger U.S. soybean prices also lent support to domestic soybean oil. Precipitation in the Yangtze River basin poses a risk to rapeseed yield prospects; domestic rapeseed production will be closely monitored. The trading strategy favors a long position in palm oil and rapeseed oil.
Live Hogs
On Tuesday, the July live hog futures contract led the decline, with deferred contracts following suit. The September contract price briefly fell below the key 12,000 yuan per tonne level, continuing its weak trend. The average ex-farm price in Henan was 9.99 yuan/kg, down 0.05 yuan/kg from the previous day. Large farms quoted prices of 10.00-10.10 yuan/kg for 120-130kg breed hogs, while medium and small farms quoted 9.60-9.80 yuan/kg. For larger 155-165kg breed hogs, prices were around 9.80 yuan/kg. In Anhui, the average price was 10.01 yuan/kg, down 0.04 yuan/kg. Large farms there quoted 9.90-10.20 yuan/kg for 120-130kg hogs, with medium and small farms around 9.80 yuan/kg, and a low of 9.60 yuan/kg. Prices for 150-165kg hogs were 9.80 yuan/kg, with highs of 10.0 yuan/kg. Overall, the July contract was dragged down by weak spot prices, with futures premiums converging lower. The September contract faced adjustment pressure as farming losses widened. In this context, the Ministry of Agriculture and Rural Affairs issued a revised "Implementation Plan for Comprehensive Hog Production Capacity Regulation (2026)" in May. The plan, considering pork market supply-demand dynamics and productivity improvements, sets the national target for normal sow inventory at around 37.5 million head, marking another reduction from the target set in February 2024. This indicates an intensification of national-level measures to reduce breeding stock. Market expectations for favorable data on heavy hog slaughter are anticipated to materialize in July. Price action for the September 2026 contract around the 12,000 yuan/tonne level warrants close attention.
Eggs
On Tuesday, the front-month July 2026 egg futures contract consolidated at high levels, closing up 0.3% at 4,404 yuan per 500 kilograms. Spot prices showed strength, with data indicating the national average egg price rose 0.11 yuan/jin to 5.27 yuan/jin. In production areas, Ningjin pink-shell eggs were at 5.15 yuan/jin, up 0.1 yuan/jin, while Heishan brown-shell eggs were at 5.0 yuan/jin, also up 0.1 yuan/jin. In consumption areas, Puxi brown-shell eggs rose 0.19 yuan/jin to 5.24 yuan/jin, and Guangzhou brown-shell eggs increased 0.2 yuan/jin to 5.55 yuan/jin. In the short term, prices in production areas are expected to rise more often than stabilize. Procurement costs for consumption areas are mostly trending higher. Downstream purchasing activity remains stable, but arrivals in consumption areas have declined, supporting the continued rise in spot egg prices to historically high levels for this period. Tight supply, combined with pre-Dragon Boat Festival stockpiling, is driving spot prices higher. Furthermore, market sentiment continues to support egg prices, maintaining a strong pattern for both futures and spot markets. Looking ahead, as southern regions gradually enter the rainy season, egg prices may face pressure from cautious trader stockpiling, increasing the probability of a seasonal pullback. The short-term outlook suggests high-level consolidation, with caution advised for potential corrections. Monitoring changes in farm restocking and culling intentions following increased profitability will be crucial for assessing future supply impacts.
Corn
On Tuesday, the July corn futures contract rose on reduced positions, with limited fund rotation into the September contract. The weighted open interest for corn increased, and prices extended their rebound. In the northeast, corn prices were stable to slightly weaker. Ongoing price cuts by local processors for new-crop purchases are negatively impacting sentiment, with shipments from the northeast production area showing no improvement. With new-season supplies entering the market and increased corporate procurement, short-term corn demand appears moderate. No significant near-term improvement is expected, with prices likely to remain stable to weak. In northern China, corn prices were mostly weak and range-bound, with slight declines in some areas. Farmer-held stocks are nearly depleted, with supplies concentrated among traders who, due to high holding costs, have strong price support intentions and are cautious about selling. Downstream processors maintain ample inventories, purchasing mainly on a need-to basis. Feed mills, influenced by substitutes like wheat and sprouted wheat, show weak demand for corn and low purchasing enthusiasm. In consumption areas, corn prices were largely stable with thin trading. Downside is limited by production area cost support. However, feed mills anticipate strong substitution effects from the new wheat harvest, which continues to divert demand away from corn, keeping procurement activity low and mostly on an as-needed basis. Technically, corn shows a short-term rebound. For the July contract, resistance near the 2,350 yuan level will be key. While the rebound may continue short-term, caution is warranted for potential technical pressure and a mid-term adjustment.
Comments