Crude oil prices climbed and concerns over high temperatures in oilseed-producing regions drove oilseed and meal markets higher this week. Oilseed prices outperformed protein meals, which were stronger than vegetable oils, with international markets rising more than domestic ones.

Ongoing hostilities between the US and Iran have fueled fears of supply disruptions, while Yemen's Houthi rebels threaten shipping, further pushing up oil prices and boosting the outlook for biodiesel demand. The weather market is a key focus, with multiple agencies issuing El Niño warnings, exposing many oilseed-producing areas to high temperatures, which increases the weather risk premium in futures prices and supports oilseed valuations. Meteorological forecasts suggest that major oilseed regions will continue to experience hot and dry weather in August, prolonging drought expectations and adding to the weather premium. Data shows that US soybeans, Canadian canola, Russian sunflower seeds, Ukrainian sunflower seeds, and domestic soybeans are generally growing well, with yields expected to remain near trend levels. Strong demand from China's continued purchases of US soybeans has boosted US soybean export sales. This resilient demand also supports oilseed prices. Driven by these multiple factors, international vegetable oils and oilseeds have reached cyclical highs.

Domestically, the focus is on the pace of inventory accumulation. Supply of domestic soybeans is ample in July and August, with crushers maintaining high processing rates. Protein meal demand is supported by firm feed consumption, while vegetable oil consumption is in its off-season, leading to weaker downstream demand. The trend of accumulating physical inventories remains unchanged, with protein meal inventory pressure being relatively lower than that of vegetable oils. Futures warehouse receipts are at a high level for the period, but for some products, such as palm oil, receipts have fallen from their highs, reflecting suppliers' reluctance to deliver at current prices. Supported by the supply-demand balance and cost factors, oilseeds and meals are likely to maintain a relatively strong trend. The market will continue to monitor developments in the Middle East, weather impacts on oilseeds, and the extent of inventory accumulation both domestically and internationally.

Eggs: Limited Demand Boost Leads to Spot Price Correction

This week, egg futures prices continued to weaken. Intra-week, they fell sharply on Monday before narrowing their losses. After dipping mid-week, prices rebounded slightly on Thursday. The decline resumed on Friday, with the weekly loss widening compared to the previous week. As of Friday's close, the main egg contract for September 2609 settled at 4022 yuan per 500 kg, down 7.37% for the week.

This week, the increase in egg spot prices narrowed, followed by a correction. As of July 24, the average daily price of brown-shelled eggs in China, as tracked by Zhuochuang Information, was 4.64 yuan per jin, down 0.04 yuan from the previous week. Early in the week, market transactions were stable across all stages. After a period of moderate restocking, demand improved slightly, leading to a brief price increase. However, towards the end of the week, market digestion weakened again, causing spot prices to correct.

Following the previous rebound in spot prices, higher egg prices have somewhat dampened demand. Additionally, the nationwide high temperatures have made trade stockpiling cautious, halting the price rise and triggering a correction. Based on seasonal demand patterns, restocking ahead of the upcoming school season, Mid-Autumn Festival, and National Day holidays is expected to support spot prices, moving them into a peak season. After the correction, there is an expectation of an upward trend. However, we must also consider that chicks placed earlier are gradually entering their laying period, which will increase new supply. On the other hand, current profitable farming margins are unfavorable for culling intentions. While culling of older hens increased slightly this week, if culling intentions remain weak, the supportive effect on egg prices from the supply side will gradually diminish. In the short term, eggs are weak. The market will continue to monitor fundamental changes affecting spot prices, while futures will focus on market sentiment and capital flows.

Corn: US Weather Risk Premium Rises, Domestic Market Consolidates

Overseas: This week, CBOT wheat and corn trended higher overall, with wheat significantly outperforming corn. Wheat prices surged sharply, driven by multiple bullish factors including Black Sea shipping risks, reduced European wheat production, and low US wheat acreage. Intra-week volatility increased, and prices rallied again at the end of the week, hitting new highs for the period. Geopolitical tensions are disrupting global wheat trade expectations, with concentrated capital inflows pushing up wheat prices, making it the leading grain in the sector. Corn followed the market sentiment but its rally was weaker than wheat's. Currently in the critical pollination window, the market is continuously pricing in the risk of hot and dry weather in the US Midwest, raising concerns about damage to new crop yields. This is supported by the USDA's supply and demand report, which lowered inventory expectations. However, lackluster export sales data and rising expectations of cooling and rainfall in the producing regions limit upside potential, resulting in a pattern of rising consolidation. Overall, the risk premium for the grain sector is increasing, with wheat showing stronger elasticity due to supply-side bullish factors, while corn is more dependent on weather-driven themes. The market will continue to track US crop conditions, developments in the Black Sea region, and the pace of global buying.

Domestic: This week, corn futures prices consolidated in a range, maintaining a relatively weak performance overall. The domestic corn spot market weakened. As of July 23, the national average weekly corn price was 2,340 yuan per ton, down 10 yuan per ton, or 0.43%, from the previous week. By region, corn in the northeast was weak. Some traders in the producing areas were actively selling due to issues like capping and mold in their stocks, but trading volumes were generally average. Overall supply in the producing areas was relatively ample. However, demand was underwhelming, making it difficult to sell grain outside the region. Corn prices in North China also weakened. Storage difficulties increased for corn in North China, prompting some traders to actively destock. The deep processing sector entered its traditional off-season, reducing corn demand, with some companies proactively cutting inventories. Enterprises diversified their raw material procurement. Prices in the consumption areas were weak, lacking effective support. Feed companies maintained low corn inventories, only purchasing for immediate needs, with a lack of bulk buying activity, leading to a generally quiet trading atmosphere. Overall, the near and far-month corn contracts are constrained by long-term moving averages, showing a volatile and weak trend. The market will continue to monitor the supply of new spring corn, changes in traders' selling pace, and shifts in policy-related grain supply.

Hog: Insufficient Demand Support Leads to Price Decline, Futures Show Backwardation

This week, China's hog spot prices continued to fall. As of July 23, the national average hog price was 10.48 yuan per kg, down 0.48 yuan from the previous week. The benchmark price in Henan province was 10.73 yuan per kg, down 0.45 yuan. During the week, large-scale farms accelerated their sales as their monthly sales progress lagged, leading to a continuous increase in hog supply. However, terminal demand was affected by hot and rainy weather, hindering product flow. Slaughterhouses produced based on sales, maintaining low slaughter volumes. Under the pressure of supply exceeding demand, hog prices continued to decline.

Piglet prices continued to rise. As of July 23, the average piglet price was 257 yuan per head, up 44 yuan from the previous week. The piglets currently being purchased will be ready for slaughter during the peak demand season before the Spring Festival, so downstream restocking demand is adequate, supporting the continued rise in piglet prices.

The average slaughter weight continued to decline this week. As of July 23, the average slaughter weight tracked by Zhuochuang sample points was 123.93 kg per head, down 0.14 kg from the previous week. While farms actively sold due to lagging monthly sales progress, high temperatures led to low daily weight gain, and the accelerated sales overall reduced the average slaughter weight.

Zhuochuang data shows that on July 23, the profit for self-breeding and fattening was -199 yuan per head, a loss expansion of 58 yuan from the previous week. The profit for piglet fattening was -200 yuan per head, a loss expansion of 117 yuan. The decline in hog prices this week, combined with higher piglet procurement costs and feed costs within the corresponding fattening cycle, led to lower sales revenue and higher costs, resulting in a decrease in profitability for both models. The larger increase in earlier piglet procurement costs made the theoretical profit decline for piglet fattening more pronounced.

According to Ministry of Commerce statistics, the number of hogs slaughtered at designated slaughterhouses in June 2026 was 38.2 million, a decrease of 2.35% month-on-month and an increase of 27% year-on-year.

This week, slaughterhouse operating rates remained weak, with minor fluctuations. Zhuochuang data shows that as of July 23, the operating rate of sample slaughterhouses was 33.88%, up 0.18 percentage points from the same period last week. Due to high temperatures, terminal pork demand decreased significantly, hampering fresh pork sales for slaughterhouses. Reduced segmentation led to a weaker willingness to procure hogs.

This week, the main hog futures contract fell to a new low before subsequently bottoming out and rebounding. Attention will be on whether this rebound can continue. As weather cools later, demand is expected to recover, and combined with improved supply due to declining production capacity, hog prices are likely to rebound. However, considering that the breeding sow inventory has not yet fallen below the normal level, the rebound is likely to be weak.