Protein Meal

On Wednesday, CBOT soybeans settled lower, weighed down by profit-taking activity. A private exporter reported a sale of 202,000 tonnes of US soybeans to China for delivery in the 2026/27 marketing year. Market attention now shifts to Thursday's weekly export sales report, with expectations pointing to net sales ranging between 1.2 million and 2.7 million tonnes. Meanwhile, a US-based agency projects the national soybean yield at 52.6 bushels per acre, slightly below the USDA's current estimate of 52.7 bushels per acre. The next supply-demand report is scheduled for release on September 11. In the domestic market, both rapeseed meal and soybean meal experienced an initial rally that later faded, tracking the movement of overseas futures. Concerns surrounding potential conflicts involving the US and Iran, as well as tensions in the Black Sea region, have pushed international soybean complex prices higher, providing some upward momentum for the domestic market. Spot soymeal trading remained subdued, with basis levels staying on the weaker side. Crushers are grappling with significant pressure from rising inventories, a consequence of hefty soybean arrivals and sustained high crushing rates. Investors are advised to monitor capital flows closely.

Vegetable Oils

On Wednesday, BMD palm oil futures closed lower, pressured by profit-taking and lackluster export demand. Shipping survey data indicated that Malaysia's palm oil exports for August fell by 6.5% month-on-month, amounting to a decline of 14.9%. In contrast, SPPOMA estimated that Malaysian palm oil production in August decreased by 3.74% compared to the previous month. Indian traders reported that the country's imports of both soybean oil and palm oil increased in August, while sunflower oil imports contracted, leading to an overall slight month-on-month increase in total edible oil imports. Indonesia's energy ministry has reaffirmed its commitment to the B50 biodiesel blending mandate through 2027, aiming to reduce reliance on imported fuels, noting that the program currently covers 80% of its target. Canadian canola and US soybean oil futures declined, following the downward trend in crude oil prices. Domestic vegetable oil markets retreated early on but rebounded during the night session, with soybean oil showing the most strength and rapeseed oil the most weakness. Spot trading remained quiet, with high inventory levels showing little change. The market structure of weaker near-term contracts versus stronger deferred contracts persists. Going forward, traders will be watching the status of shipping through the Strait of Hormuz, along with vegetable oil consumption patterns and capital flows.

Live Hogs

On Wednesday, the live hog futures market saw its main contract for November delivery weaken in the morning session, stage a modest rebound in the afternoon, and then settle into range-bound trading. The contract closed the day up 0.47%, finishing at 11,740 yuan per tonne. In the spot market, data from Zhuochuang Consulting showed that China's average daily hog price was 11.04 yuan per kilogram, down 0.1 yuan from the previous day. In the benchmark delivery area of Henan, the average price was 11.2 yuan per kilogram, a decrease of 0.16 yuan. Prices were flat in Sichuan, while declines were registered in Guangdong, Liaoning, and Shandong. Farmers have increased their willingness to market hogs, leading to greater supply in the market. However, demand remains flat, with wholesale pork moving at a slower pace and slaughterhouses purchasing limited volumes. This dynamic has continued to push prices downward. After a recent pullback that brought futures close to previous lows, the market showed signs of stabilization yesterday, suggesting the potential for a short-term rebound. Attention should be paid to how spot prices and market sentiment impact futures trading.

Eggs

On Wednesday, egg futures traded in a sideways pattern, with the main October contract declining 0.72% to settle at 3,738 yuan per 500 kilograms. In the physical market, Zhuochuang Consulting data indicated the national average egg price remained steady at 4.96 yuan per catty. In production areas, Ningjin's powdered shell eggs were priced at 4.75 yuan per catty, while Heishan's brown shell eggs held at 4.8 yuan per catty, both unchanged from the prior day. In consumption areas, Puxi's brown shell eggs were quoted at 5.13 yuan per catty, and Guangzhou's brown shell eggs at 5.15 yuan per catty, also flat. Egg supply remains stable, and market demand is steady, with downstream buyers purchasing according to their immediate needs. As a result, spot prices have held firm. Futures prices continue to oscillate within a defined range. Market participants are watching for a directional breakout, while monitoring changes in demand on the spot side.

Corn

On Wednesday, corn futures saw an increase in open interest while prices underwent a period of consolidation. The main contract closed with a small bearish candlestick, although prices remain at relatively elevated levels. In the spot market, trading activity in Northeast China was lackluster. Despite a rise in corn prices last week, traders remain in a loss-making position and are adjusting their sales strategies based on their individual circumstances. With the arrival of the new crop season imminent, market attention is increasingly focused on the upcoming harvest. Observations from Liaoning suggest a high probability of reduced output in that province. Market participants are monitoring the availability of new Liaoning corn and the pace of farmer selling. In North China, corn prices saw little change, generally maintaining a narrow range-bound adjustment. Supply-side pressure from inventory releases persists, and this pressure is expected to intensify as the new crop approaches the market. Downstream demand is steady, with buyers sticking to a procurement-on-demand approach. Prices are expected to remain weak and volatile in the lead-up to the new grain's release. In the marketing districts, corn quotations have stabilized with minor adjustments, though there is a noticeable divergence between market sentiment and actual trading activity. The recent rebound in futures has lent some support to the spot market atmosphere, but its impact on actual transactions has been limited. Downstream enterprises remain cautious in their purchasing, generally maintaining procurement levels to meet only immediate production needs. Overall, the rotation of capital among agricultural commodity sectors warrants continued attention. In the short term, be wary of the risk of high-level price corrections if funds exit the market.