Protein and Oilseed Meals
On Tuesday, CBOT soybean prices fell as crude oil futures declined. The market holds an optimistic outlook for US-Iran negotiations, with crude oil dropping nearly 5% overnight. Both soybean meal and soybean oil saw decreases. The latest crop report indicated a US soybean good-to-excellent condition rating of 63%, the lowest for this time of year in three years, falling short of the market consensus of 64%. This suggests that rainfall in the Midwest was insufficient to improve crop conditions, with the market continuing to focus on August weather patterns. The USDA confirmed a private sale of 132,000 tonnes of soybeans to China, marking the second such confirmation this week. Domestically, a broad rally in commodities lifted the prices of both oilseed meals. Last week's auction of imported soybeans saw weak demand, and another state reserve soybean auction is scheduled this week, with results closely watched. Data from Mysteel shows that domestic soybean and soybean meal inventories rose last week, along with an increase in unexecuted soybean meal contracts. The ongoing domestic supply glut continues to pressure spot and futures prices. The market remains focused on weather conditions in producing regions and the pace of domestic protein meal stock accumulation.
Vegetable Oils
On Tuesday, BMD palm oil prices rose to a one-week high, tracking broader market gains. Data from Indonesia's statistics bureau shows the country exported 11.28 million tonnes of crude and refined palm oil in the first half of this year, up 2.5% year-on-year. Traders reported that India's edible oil imports in July climbed to their highest level in ten months. Canadian canola prices increased, playing catch-up to overseas markets closed on Monday. Weather forecasts indicate cooler temperatures in Canada in August, which should benefit canola growth. The market holds an optimistic outlook for US-Iran negotiations, with crude oil dropping nearly 5% overnight. Domestically, a broad rally in commodities lifted vegetable oil prices, with rapeseed oil outperforming soybean oil, which outperformed palm oil. Mysteel data shows that domestic vegetable oil inventories continued to climb last week. Domestic demand for vegetable oils remains weak, and high inventories are weighing on spot and futures prices. A clear turning point in domestic and international vegetable oil inventories has yet to emerge. The market will continue to monitor shipping conditions through the Strait of Hormuz and overall vegetable oil consumption.
Live Hogs
On Tuesday, live hog futures rebounded from lows, with the main 2609 contract oscillating higher during the session, closing up 1.92% at 10,895 yuan/tonne, and the 2611 contract gaining 1.9%. In the spot market, data from Zhuochuang shows that the national average live hog price was 10.38 yuan/kg yesterday, up 0.06 yuan/kg from the previous day. The benchmark delivery region of Henan saw an average price of 10.4 yuan/kg, a decrease of 0.06 yuan/kg. Prices were flat in Sichuan, while they fell in Guangdong, Liaoning, and Shandong. High temperatures are slowing terminal wholesale pork movement, resulting in an overall oversupply situation and a downward trend in prices. Futures rebounded after hitting lows, but open interest declined, suggesting a low probability of sustained upward momentum. As weather cools later, demand is expected to recover, combined with supply improvements from declining production capacity, which could lead to a hog price rebound. However, given that the sow herd has not yet fallen below the normal level, any rebound is expected to be modest.
Eggs
On Tuesday, egg futures pulled back, with the main 2609 contract closing down 1.31% at 4,008 yuan/500 kg, and the 2610 contract falling 2.15%. In the spot market, data from Zhuochuang shows the national average egg price was 4.36 yuan/jin yesterday, up 0.01 yuan/jin from the previous day. In producing regions, Ningjin's pink-shelled eggs were 4.2 yuan/jin, and Heishan's brown-shelled eggs were 4 yuan/jin, both flat. In consuming regions, Puxi's brown-shelled eggs were 4.58 yuan/jin, flat, while Guangzhou's brown-shelled eggs were 4.73 yuan/jin, up 0.13 yuan/jin. The terminal market is trading smoothly, with downstream procurement activity picking up. However, high temperatures continue to limit trade inventory willingness, leading to stable prices in most areas and a few increases. As temperatures drop later, demand is expected to enter the seasonally strong Q3 period, supporting a rebound in spot prices. Futures prices have retreated again after their initial rally, with open interest continuing to increase, suggesting short-term consolidation.
Corn
On Tuesday, corn futures saw an increase in open interest and prices adjusted lower, continuing a weak trend. Recently, both the September and November corn contracts have fallen in tandem, indicating a persistent weak market. In Northeast China, corn prices have generally been revised downward last week, with poor market activity. Due to quality issues in some corn, traders are keen to sell, but transactions are low. Demand from both deep processing and feed companies is generally lackluster. With limited time to clear old crop stocks before the new crop arrives, the supply in Northeast China appears relatively ample, and a significant market improvement is unlikely in the short term. In the North China region over the weekend, corn prices continued to weaken. Market sentiment is largely bearish, and trader inventories remain high year-on-year. Combined with the upcoming arrival of spring corn, traders are actively selling, leading to a relatively loose supply situation. Downstream companies are showing limited buying interest, purchasing only on a need basis. The market will be watching the arrival of the spring corn crop. Over the weekend, corn prices in consuming regions remained largely stable, with limited adjustments in trader quotes. Downstream feed companies are only making small, need-based purchases with no stockpiling intentions, resulting in overall quiet trading and slow movement. Prices in consuming regions are expected to fluctuate within a narrow range in the short term. Overall, the corn market in August is influenced by a mix of bullish and bearish factors, including substitute products and weather. The El Ni帽o drought provides price support for US grain markets, but its impact on China is limited, with futures prices expected to continue their weak, volatile trend.
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