Protein Meals: CBOT soybeans traded higher within a fluctuating range on Tuesday, with the market awaiting Friday's supply-demand report results. Concerns over hot, dry weather during the US soybean growing season provided price support. US soybean export inspections totaled 422,000 metric tons, in line with market expectations. Post-market crop reports showed soybean condition ratings at 58% good-to-excellent, unchanged from the previous week. China's soybean imports from January to August reached 74.1 million tons, up 1.1% year-on-year. In the domestic market, both soybean meal and rapeseed meal trended higher. Concerns over the US-Iran situation, the Black Sea region, and weather conditions continued to fuel gains in agricultural products.
The spot soybean meal market remained subdued with weak basis levels. Steel Union data showed domestic soybean inventories continued to climb last week, driven by high soybean arrivals and elevated crushing volumes. The domestic soybean meal supply remains ample, while expectations for higher costs are strengthening. Market participants should monitor capital flows closely.
Oils: BMD palm oil closed flat on Tuesday, supported by ongoing weather risks to production and stronger soybean oil prices. The market is awaiting the MPOB supply-demand report results. High-frequency production data indicated that August Malaysian palm oil output may decline by nearly 1% month-on-month, as reduced production in Sabah outweighed increases in Sarawak and Peninsular Malaysia. Concerns are rising over a broader production decline in Malaysian palm oil. A previous survey projected Malaysian palm oil inventories to rise to 2.76 million tons in August, a seven-month high, driven by expectations of the strongest production levels in nine months and weaker exports.
Domestic edible oil markets broke out to the upside, following the strength in overseas markets. A broad rally in commodities coincided with heightened Middle East tensions. The crude oil sector led gains, with edible oils and oilseeds following suit. Steel Union data showed edible oil spot inventories continued to climb, reflecting increasing supply against shrinking demand. Going forward, attention remains on the situation at the Strait of Hormuz, edible oil consumption, and capital flows.
Live Hogs: Hog futures on Tuesday traded with a firm bias, with the main 2611 contract opening slightly higher before pulling back in choppy trade, strengthening in the afternoon and easing at the close. It ended the day up 0.42% at 11,845 yuan per metric ton. In the spot market, the national average daily hog price was 10.9 yuan per kilogram, flat from the previous day. In the benchmark delivery area of Henan, the average price rose by 0.14 yuan to 11.16 yuan per kilogram. Prices rose in Shandong and Liaoning, stayed flat in Sichuan, and fell in Guangdong.
In most northern regions, reduced slaughter supply from farms provided solid demand support, making it difficult for downstream buyers to procure at lower prices, leading to an overall upward trend in hog prices. However, in parts of the northeast and south, slower distribution pressured prices lower. From a seasonal perspective, demand is expected to improve in the third quarter, and year-end demand during the peak season should support expectations for a price rebound. Still, ample short-term supply will limit upside potential. In futures markets, declining production capacity expectations continue to support improved long-term supply fundamentals, resulting in a weaker nearby and stronger deferred contract structure. Attention should be paid to the impact of spot prices and market sentiment on futures.
Eggs: Egg futures on Tuesday saw near-month contracts outperform deferred contracts, supported by firm spot prices. The main contract shifted to the 2611 contract, which traded slightly lower in choppy activity, closing down 0.55% at 3,806 yuan per 500 kilograms. Spot prices continued to firm, with the national average at 5.06 yuan per catty, up 0.03 yuan. In production areas, Ningjin pink-shell eggs were stable at 4.95 yuan, while Heishan brown-shell eggs rose 0.1 yuan to 4.9 yuan. In consumption areas, Puxi brown-shell eggs were unchanged at 5.13 yuan, and Guangzhou brown-shell eggs rose 0.07 yuan to 5.3 yuan.
Traders bought and sold according to market conditions, with most prices in consuming regions rising and a few holding steady. Currently in the peak demand season, and until pre-holiday stocking for the Mid-Autumn Festival and National Day concludes, egg spot prices are likely to remain firm, providing expectations for upside in futures. Monitor the impact of demand on spot prices and market sentiment on futures.
Corn: Corn futures saw open interest continue to rise on Tuesday, with the main contract closing on a small bullish candle, essentially recovering earlier losses. Corn prices in the northeast remained broadly stable, though trading activity was relatively subdued. In the Heishan area of Jinzhou, Liaoning, the opening price for new crop corn at 30% moisture was around 0.86 yuan per catty. Currently, traders are awaiting new crop supplies, watching farmer selling dynamics and downstream purchasing once the new crop hits the market.
Over the weekend, corn prices in North China continued to decline as old and spring corn supplies remained steady, while autumn corn harvesting began sporadically. This seasonal supply pressure increased, with deep-processing plants seeing high delivery volumes and repeatedly lowering purchase prices. As autumn corn volumes rise, corn prices are expected to remain on a seasonal downtrend. In the weekend marketing areas, corn prices held steady. With new crop corn coming to market in producing regions, traders accelerated warehouse clearing of old stocks, which pressured old crop prices in consuming regions. Currently, enterprises in these areas maintain low inventories and purchase on an as-needed basis, with some utilizing imported grains and feed wheat as substitutes.
On the technical front, corn weighted open interest increased, and the medium-term rebound trend remains intact. With the short-term correction concluded, futures prices are expected to resume their upward movement.