Corn: Neutral 1. Market Focus: The market continues its weak performance as the timing for significant grain releases remains uncertain. Recent attention is on new wheat prices; while the new season's wheat crop is expected to be abundant overall, quality is relatively weak. Grain substitution by feed enterprises is gradually expanding. The market awaits further reduction in grain inventories and futures positions. Before early June, the opening price of new wheat may serve as a key variable for bearish sentiment to exhaust, with the pressure from the expected bumper harvest becoming increasingly strong. Although feed-use soybean meal and corn prices are continuously declining and approaching cost-support levels, note that wheat substitution is still being priced in. Short-term strength in spot market purchases and sales does not constitute a sustained bullish factor. Market news regarding rice auctions has a diminishing, back-and-forth impact on futures, suggesting reduced focus is appropriate. 2. View Summary: Adopt a wait-and-see approach, awaiting further digestion of bearish factors.
Soybean Meal: Neutral 1. Former U.S. President Trump indicated that negotiations between the U.S. and Iran have entered their final stage, leading to a significant overnight drop in WTI crude oil prices. This triggered profit-taking by long positions in agricultural commodities, with U.S. soybeans following the downward trend. Stone X noted that the market remains cautious in trading on the theme of the U.S.-China purchase agreement until further details are disclosed, which may limit its positive impact on U.S. soybean prices. Meanwhile, market focus is gradually shifting to the progress of the new crop planting in North America. The current faster-than-usual U.S. soybean planting pace is unfavorable for accumulating weather-related price premiums, also pressuring U.S. soybean prices. 2. Dalian soybean meal futures are moving in tandem with the U.S. market, with prices expected to remain in a wide range. During the South American supply window, even if U.S. soybean import tariffs are subsequently removed, domestic commercial oil mills may still opt for the more price-competitive South American soybeans in the short term. This would anchor actual import costs to the combination of "CBOT soybeans + South American CNF (Cost and Freight)" until new-crop U.S. soybean CNF quotes for distant months gradually become available. View Summary: Adopt a range-trading strategy. The September contract is expected to trade within a range of 2950-3050 yuan per ton intraday.
Eggs: Neutral Spot prices in major producing regions are fluctuating at high levels. The spot quote in Guantao, Hebei, is 4.31 yuan per jin, up 0.11 yuan from the previous day. The significant rise in spot prices has driven a noticeable catch-up rally in nearby futures contracts, driven by basis convergence. Recent developments warrant attention: 1) Breeding profits have reached their highest level in nearly five years for the same period, with static profits at +1.05 yuan per jin, up 0.29 yuan from last week. 2) The age of culled hens has increased again, reaching 518 days this week, up 4 days week-on-week, indicating a further intensification of delayed culling. From the perspective of marginal changes in fundamentals, the positive feedback from rising spot prices is strengthening producers' willingness to delay culling and hold onto stock. Nearby contracts are primarily driven by basis convergence in the short term. Considering the strengthening sentiment for delayed culling and the possibility of concentrated new capacity releases after June-July. View Summary: Nearby contracts face significant divergence; focus on the basis convergence driver. For deferred contracts, consider establishing short positions on rallies, betting on pressure from capacity releases.
Live Hogs: Neutral Live hog spot prices are fluctuating. The average spot price in major producing regions yesterday was 9.54 yuan per kg, up 0.01 yuan from the previous day. On May 14, the Ministry of Agriculture and Rural Affairs released a new version of the "Comprehensive Regulation Implementation Plan for Hog Production Capacity," lowering the normal inventory of breeding sows to 37.5 million head. At the National Special Work Conference on Hog Industry Regulation held on May 18, relevant authorities clarified multiple mandatory control measures and assessment supervision mechanisms, stating they would strictly investigate capacity expansion contrary to the trend. Futures prices experienced a rapid rebound yesterday afternoon due to policy expectation speculation. Trading logic for nearby and deferred contracts has diverged. Weak short-term spot prices constrain the rebound's extent, while the medium-term focus is on opportunities for improvement stemming from continued capacity reduction. View Summary: Adopt a range-trading strategy for nearby contracts. Deferred contracts, due to their high premium levels, face short-term adjustment pressure. For medium to long term, consider establishing long positions in deferred contracts on dips within lower ranges.
Risk Disclosure: The information herein is based on publicly available sources. While efforts are made to ensure accuracy and reliability, no guarantee is made regarding its completeness or accuracy. Trading based on this information is at one's own risk. This report does not constitute personal trading advice and does not consider individual clients' specific investment objectives, financial situations, or needs. Clients should assess whether any opinions or suggestions herein suit their particular circumstances.
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