Protein Meal:
On Tuesday, CBOT soybeans declined as traders adjusted positions ahead of the USDA supply and demand report. The latest US soybean condition ratings fell to 62%, reflecting increased weather impacts on crops. Attention is focused on August weather in key production areas, with current outlooks suggesting favorable rainfall. The USDA confirmed a private sale of 136,000 tonnes of soybeans to China. Domestically, protein meal prices traded in a volatile range with cautious market activity as participants awaited the USDA report. Steelhome data showed rising inventories of soybeans and soymeal at domestic crushers last week, along with increases in unexecuted contracts. The auction of imported soybeans on August 12 will be monitored for transaction volumes, with expectations of continued ample supply in the soybean market. The market continues to monitor weather conditions in production areas, the pace of domestic protein meal inventory accumulation, and the upcoming USDA supply and demand report for this week.
Oils and Fats:
On Tuesday, BMD palm oil rose for a second consecutive day, approaching four-month highs, tracking gains in neighboring markets. The ongoing situation in the Middle East, with reduced hopes for reopening the Strait of Hormuz and increased concerns about navigation through the Bab el-Mandeb Strait, pushed crude oil prices to a one-week high. Shipping data indicates that Malaysia's palm oil exports for August 1-10 increased by 2.6% to 9.21% month-on-month. Meanwhile, production is expected to decrease by 9.73% during the same period, easing pressure on August inventory accumulation. An Indonesian official noted that the country is experiencing abnormal drought, with wildfires intensifying on Sumatra and Kalimantan islands, and conditions are not yet suitable for cloud seeding. Canadian canola fell, giving back most of Monday's gains, due to improved weather prospects. Domestically, oil prices strengthened, following crude oil gains. Spot prices rose in some areas but remained mostly stable. Futures market capital is rapidly shifting to January contracts, tracking fluctuations in import costs. The market continues to monitor shipping conditions through the Strait of Hormuz and oil consumption trends.
Live Hogs:
On Tuesday, live hog futures stabilized after recent gains, with the main 2611 contract moving sideways during the session and closing 0.33% lower at 12,130 yuan per tonne. According to Zhuochuang data, the national average live hog price was 10.8 yuan per kilogram, down 0.02 yuan per kilogram from the previous day. In the benchmark delivery area of Henan, the average price was 10.88 yuan per kilogram, up 0.08 yuan per kilogram. Prices in Sichuan were flat, while Liaoning and Guangdong saw declines, and Shandong reported increases. After several days of sustained price increases, the market's tolerance for high prices has weakened, leading to a halt in gains across most regions, with some areas already seeing declines. Following the recent rally in futures prices, short-term futures are expected to follow spot prices in stabilizing. Attention will be on spot market performance and changes in market sentiment.
Eggs:
On Tuesday, egg futures continued to decline, with the main 2610 contract opening lower and trending downward, while open interest fell at the close. The contract ended the day 2.2% lower at 3,818 yuan per 500 kilograms. According to Zhuochuang data, the national average egg price was 4.63 yuan per jin, up 0.04 yuan per jin from the previous day. In production areas, the price of pink-shell eggs in Ningjin was 4.5 yuan per jin, unchanged, while brown-shell eggs in Heishan increased by 0.1 yuan per jin to 4.4 yuan per jin. In consumption areas, brown-shell eggs in Puxi rose by 0.11 yuan per jin to 4.8 yuan per jin, while brown-shell eggs in Guangzhou were stable at 4.95 yuan per jin. End-market buyers are purchasing as needed, with normal procurement enthusiasm from downstream players. Short-term egg prices in production areas are expected to be mostly stable with limited increases, while procurement costs in consumption areas are likely to remain stable, with occasional increases. After a sustained rebound, futures prices have corrected, indicating a period of short-term adjustment. Attention will be on the impact of demand on spot prices and market sentiment on futures.
Corn:
On Tuesday, corn prices traded higher, with the main contract closing with a small bullish candle and a modest upper shadow. On Monday, the near-month 2609 contract saw a reduction of over 80,000 lots in open interest, while the weighted contract decreased by about 50,000 lots. By Tuesday, open interest was largely stable. In the Northeast producing region, corn prices continued to decline, pressured by abundant and cheaper alternative feed energy sources. In the North China region, corn prices were generally stable, with localized fluctuations of 6-10 yuan per tonne. Following the sustained price decline, inventories have been largely cleared, and with the impact of typhoons bringing more rainfall to North China this week, prices have found some support. Concentrated selling by traders has decreased, and deep-processing enterprises have seen low arrivals at their gates, leading to modest price rebounds for some. However, other enterprises have adjusted prices downward based on their own conditions. In the consumption areas, corn market quotes were weaker, with a slight downward shift in the center of gravity. The harvest of spring corn has begun, further boosting supply in consumption areas. Poor profitability in the livestock sector, combined with continued substitution of corn by alternatives, has kept the market under pressure. In the absence of positive catalysts, prices are expected to continue a weak and volatile trend. In the futures market, corn prices rose with reduced open interest early this week, supported by policy benefits in the wheat market. The agricultural commodity sector stabilized, and both near-term and deferred corn contracts strengthened.