Protein Meal: Soybean futures on the CBOT rose on Monday, closing above $12 per bushel, supported by increased U.S. soybean demand and gains in related markets. U.S. soybean export inspection data largely met expectations. The previously released April soybean crush figures were better than anticipated. A crop progress report released after the market close showed U.S. soybean planting at 67%, significantly ahead of schedule. Domestically, protein meal prices followed the upward trend, maintaining a volatile but firm pattern. China faces significant pressure from soybean arrivals in May, coupled with severe losses in the livestock farming sector, leading to stagnant spot prices and weaker futures, with the basis market remaining soft. There are no immediate supply concerns for domestic soybean meal, but costs are rising. Trading strategy suggests short-term long positions.
Oils and Fats: BMD palm oil futures advanced on Monday, buoyed by favorable production data and rising crude oil prices. Shipping data indicated that Malaysian palm oil exports for the 1st to 15th of the month decreased by 1% to 16% compared to the previous period. Production during the same period fell by 16% month-on-month. U.S. soybean oil and Canadian canola also gained, tracking the rise in crude oil. With canola planting concluding, the amount of nitrogen fertilizer purchased by farmers will determine the final planted area. In the domestic market, oil and fat prices consolidated with fluctuations. Palm oil led the gains, while soybean oil and canola oil followed. Rising palm oil import costs drove the futures market higher. As rapeseed arrivals increase, crushers' operations have notably recovered, leading to a gradual rise in canola oil supply and inventory replenishment. The customs clearance speed for Brazilian soybeans remains slow, and with an upcoming auction of approximately 60,000 tonnes of imported soybeans, soybean oil inventories are expected to gradually accumulate. The trading strategy recommends short-term long positions.
Live Hogs: On Monday, the nearby July 2607 hog futures contract continued to decline, while spot hog prices remained stable, indicating a convergence of the futures premium. Spot market hog quotes were mostly steady with minor adjustments. Prices in Heilongjiang were stable, while prices in Henan saw a slight increase. The mainstream transaction price in Heilongjiang was 9.00 yuan/kg, unchanged from the previous day. In Jilin, the mainstream price was 9.12 yuan/kg, also flat. In Liaoning, the mainstream ex-farm price was 9.35 yuan/kg, down 0.07 yuan/kg from yesterday. In Inner Mongolia, the mainstream transaction price was 9.26 yuan/kg, a decrease of 0.08 yuan/kg. The average ex-farm price in Henan was 9.97 yuan/kg, up 0.06 yuan/kg from the previous day and 0.12 yuan/kg from last Friday. Large-scale farms in the region quoted 9.90-10.15 yuan/kg for 120-130 kg fine-breed hogs, with a high of 10.25 yuan/kg. Medium and small farms quoted 9.60-9.80 yuan/kg for 120-125 kg hogs. Prices for 155-165 kg fine-breed hogs were 9.80-10.00 yuan/kg. Technically, spot hog market quotes remain stable, with Henan spot prices holding around the 10 yuan/kg level. The July contract price is undergoing a correction, while the September contract awaits buying opportunities post-adjustment. The strategy suggests temporary short-term long positions.
Eggs: On Monday, the main July 2607 egg futures contract opened lower, consolidated, and then strengthened in the afternoon, closing up 1.11% at 3,829 yuan per 500 kg. The nearby June 2607 contract gained 0.36% for the day, continuing its pattern of high-level consolidation. Spot prices, according to Zhuochuang data, showed the national average egg price at 4.41 yuan/jin, unchanged from the previous day. In production areas, pink-shell eggs in Ningjin were 4.35 yuan/jin, and brown-shell eggs in Heishan were 4.2 yuan/jin, both flat. In consumption areas, brown-shell eggs in Puxi were 4.51 yuan/jin, unchanged, while brown-shell eggs in Guangzhou were 4.7 yuan/jin, down 0.05 yuan/jin. Terminal consumption varied, with most traders purchasing as needed. Egg prices in major consumption markets were mostly stable, with a few declines. Short-term improvements on the supply side have supported both spot and futures prices. However, as spot prices rebound, breeding profits increase, reducing culling intentions, which is unfavorable for future capacity reduction. Coupled with the upcoming rainy season, leading to cautious trade stockpiling, egg prices face downward pressure. Nevertheless, the short-term futures market shows strength. The focus is on opportunities to sell on rallies, while remaining alert to potential disruptions from increased culling volumes and strength in related commodity prices.
Corn: On Monday, the main July 2607 corn futures contract consolidated, closing with a doji candlestick pattern. In the spot market, expectations for a higher proportion of sprouted wheat due to rainy weather have put pressure on corn futures, anticipating increased supply from substitutes. Over the weekend, corn prices in Northeast China were relatively stable. Traders in the Northeast production region maintained a steady sentiment with limited willingness to sell at low prices. However, market trading activity remained subdued, and the digestion of Northeast grain supplies is currently slow. The short-term market faces several bearish factors, suggesting prices may trend slightly weaker. In North China, weekend corn prices were generally stable with minor increases at a few enterprises, indicating a predominantly consolidating market. While North China traders continue to clear inventories, the pressure has eased. Forecasted rainy weather in North China this week is expected to hinder corn trading and reduce market supply, potentially supporting stable to firm prices. In consumption areas, weekend corn prices saw localized adjustments. Residual grain at the grassroots level is nearly depleted, with ongoing low arrivals. Traders are holding back supplies to support prices. The approaching new wheat harvest strengthens expectations for feed substitution. Downstream demand remains weak with limited consumption recovery. Risks of moisture resurgence in some areas have led some enterprises to lower prices to control quality. Overall, the corn market continues to monitor pressure from wheat harvests, rice auctions, and imported grain arrivals. The medium-term outlook for corn prices remains bearish.
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