Protein Meal: On Thursday, Chicago Board of Trade (CBOT) soybean futures edged lower, pressured by favorable US weather forecasts. Both soybean meal and soybean oil contracts declined. A survey projected US soybean production at 120.6 million tonnes, with estimates ranging from 114.5 million to 126.71 million tonnes. This compares with the 121.8 million tonnes forecast in the July supply and demand report, with attention now turning to the August report for potential adjustments. Export sales data showed US soybean net sales of 1.333 million tonnes for new crop last week, including 519,000 tonnes sold to China. Private sales to China accounted for 132,000 tonnes. Domestically, meal and oil markets fell with reduced open interest, reflecting overall weakness. Spot soybean meal continues to accumulate inventory, with subdued terminal transactions. The market is focused on today's auction of 504,000 tonnes of soybeans and the future auction pace. Additionally, attention remains on production area weather and the pace of domestic protein meal inventory buildup.
Vegetable Oils: On Thursday, Bursa Malaysia Derivatives (BMD) palm oil futures closed higher, tracking crude oil strength. Indonesia's meteorological agency reported a significant increase in fire-affected areas in July as the El Niño phenomenon intensifies nationwide, with the weather system expected to persist into early July. US soybean oil and Canadian canola futures fell amid a night session decline in crude oil. High temperatures on the Canadian prairies have not yet reached levels damaging to canola flowers or pollen, easing concerns about yield impacts. Domestically, vegetable oil markets traded in a range with low transaction volumes. Weak demand and high inventories have led to a synchronized decline in futures and spot prices. The inflection point for domestic and international vegetable oil inventories remains unclear. The market will continue to monitor the Strait of Hormuz shipping situation and vegetable oil consumption trends.
Live Hogs: On Thursday, the main live hog futures contract for September 2026 continued its decline, closing 1.46% lower at 10,775 yuan per tonne. In the spot market, the national average daily price for live hogs stood at 10.2 yuan per kilogram, unchanged from the previous day, according to Zhuochuang data. In the benchmark delivery area of Henan province, the average price was 10.5 yuan per kilogram, also flat. Regional variations were observed: Sichuan and Shandong saw increases, Guangdong was stable, and Liaoning experienced declines. Some farmers maintained a wait-and-see stance with stable prices, while others showed price-supportive sentiment leading to low-end increases. Conversely, some regions saw clear intentions to lower prices and increase sales volumes, resulting in declines. Short-term futures continue to show weakness, but with cooler weather and demand recovery later in the season, coupled with supply improvements from declining production capacity, hog prices may rebound. However, given that the sow herd has not yet fallen below the normal retention level, the rebound is expected to be modest.
Eggs: On Thursday, egg futures traded weakly, with the main September 2026 contract closing 1.25% lower at 4,040 yuan per 500 kilograms, and the August 2026 contract falling 1.55%. In the spot market, the national average egg price was 4.63 yuan per jin, unchanged from the previous day, according to Zhuochuang data. In production areas, Ningjin's powdered egg price was 4.6 yuan per jin, and Heishan market's brown-shell egg price was 4.2 yuan per jin, both flat. In consumption areas, Puxi's brown-shell egg price was 4.8 yuan per jin, and Guangzhou market's brown-shell egg price was 4.8 yuan per jin, also unchanged. With stable demand, egg spot prices have stabilized after recent corrections. Futures prices, after a brief rebound, have corrected again, showing short-term weakness. Attention will be on spot price performance as demand picks up and market sentiment's impact on futures.
Corn: This week, corn futures trended downward, with deferred contracts showing particular weakness. In Northeast China, corn trading activity was low, with traders relatively willing to sell but downstream buyers adopting a wait-and-see approach, leading to generally moderate purchasing interest. Corn growth in the region, while slightly behind the historical average, remains within a normal range for the season, with no supportive weather factors currently. In North China, corn prices were generally stable, with narrow adjustments in some areas and overall price ranges remaining steady. After recent price declines, supply and demand have reached a relative balance, but trade channel inventory levels remain higher than the same period last year. Additionally, spring corn will enter the market in mid-to-late August, adding to supply. Overall, market supply and demand remain relatively loose. In consuming regions, corn market quotations were mostly stable, with no demand-driven impetus for significant price increases. Loosening northern port quotations and low futures prices have weighed on spot market confidence. Demand continues to be suppressed by substitute products, with transactions primarily small-scale and for immediate needs, leaving room for price negotiation. In summary, from July to August, corn market influences from substitutes and weather are mixed. El Niño-induced drought supports US grain prices but has limited impact domestically, resulting in range-bound futures trading.
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