Core Viewpoint: Neutral stance.

Prices have been mixed this week. Imported Sudanese peanut prices held steady, while old-crop prices in Northeast China firmed. However, new-crop prices in regions like Henan declined. Oil-grade peanut prices remained stable, and as the futures market pulled back, the weekly basis for oil-grade peanuts strengthened.

Supply: Old-crop inventories are thin in Henan and Shandong. Spring peanut harvests in Henan have been delayed due to rainfall, and early-maturing varieties in other regions are also seeing limited supply. Demand: Weekly arrivals at oil mills were minimal, with most waiting for the new crop. Demand is improving ahead of school and holiday seasons, but traders are buying hand-to-mouth and food processors are not stocking up heavily. Weather: Light rain is expected in western and northern Henan, while heavier and more widespread rainfall is forecast for the Northeast over the next week.

Old-crop peanut prices strengthened this week, while new-crop prices weakened. High launch prices for new peanuts have given old stock a price advantage. Wet weather has also delayed the drying and marketing of new peanuts, which have higher moisture content and inconsistent quality. This has pushed downstream buyers toward old-crop peanuts. With inventories depleting and cold-storage costs elevated, Northeast producers raised old-crop prices while new-crop prices were cut. The delayed spring peanut harvest supports prices, but the market remains more concerned about demand, especially given the weak consumption environment this year.

The main peanut futures contract fell this week with rising open interest, breaking its previous sideways range near 8,200 yuan per tonne. It has not followed the path of Soybean No.1. The market is divided on the final scale of the new crop's production cut, with some believing the reduction is only partial. While a reduction in spring peanuts is widely accepted, wheat-stubble peanut yields are still undetermined. In the current weak consumption climate, the market is waiting for oil mills to begin purchasing during the peak wheat-stubble harvest. However, recent spring peanut prices have not been significantly higher than in previous years, meaning the production cut has not generated a large price premium. Oil mills, which handle around 60% of oil-grade consumption, maintain greater pricing power.

There is less disagreement regarding the Soybean No.1 production cut. Domestic high-protein soybeans are concentrated in the Northeast, whereas peanut delivery sources are more dispersed. When imported soybeans are tight, Soybean No.1 can shift from food use to crushing, and recent strength in Soybean No.2 and soymeal prices has supported its rally. The soybean industry chain is also longer and broader than that of peanuts.

However, considering new-crop planting costs and old-crop storage carrying costs, the peanut market is likely to remain range-bound at the bottom for now. The market can only hope for weather to impact yields.

Peanut Cash Prices

As of August 21, 2026, imported Sudanese peanuts were quoted at 8,050 yuan per tonne, stable on the week. The average common peanut price rose 0.71% week-on-week to 8,355 yuan per tonne, while the average commercial peanut price fell 0.26% to 9,475 yuan per tonne. Oil-grade peanut prices held steady at 7,454 yuan per tonne. The main peanut futures contract fell 1.12% on the week to 8,138 yuan per tonne.

Oil-Grade Peanut Basis

As of August 21, 2026, the domestic average oil-grade peanut price stood at 7,454 yuan per tonne. The cash basis for PK2610 was -684 yuan per tonne, compared with -776 yuan per tonne the previous week. Stable cash prices combined with a falling futures market led to a stronger basis.

Commercial vs. Oil-Grade Price Spread

As of August 21, the spread between commercial and oil-grade peanuts narrowed to 2,021 yuan per tonne from 2,045 yuan per tonne the prior week, driven by the weekly decline in commercial peanut prices.

Northeast vs. Henan Regional Spread

In Fuyu, Jilin, common peanuts (8-sieve, 9% moisture) rose 0.15 yuan per jin week-on-week to 4.45 yuan per jin. In Zhengyang, Henan, the same grade rose to 5.15 yuan per jin, down 0.1 yuan from the initial quote. The spread flipped from positive to negative because Northeast quotes reflect old-crop prices while Henan reflects new-crop prices. Old-crop peanuts in the Northeast have a price advantage, and downstream buyers preferred them, lifting weekly prices. In contrast, Henan's new-crop peanuts, with their high prices and lower moisture, saw limited downstream acceptance and fell on the week.

Peanut Oil Prices

As of August 21, 2026, first-grade ordinary peanut oil in Shandong rose 200 yuan per tonne week-on-week to 13,900 yuan per tonne. First-grade soybean oil in Shandong rose 380 yuan per tonne to 8,940 yuan per tonne. The peanut oil-soybean oil spread narrowed to 4,960 yuan per tonne from 5,140 yuan the previous week. The peanut oil price increase was not demand-driven but was instead lifted by higher imported peanut oil prices.

Peanut Meal Prices

As of August 21, 2026, peanut meal in Shandong was quoted at 3,000 yuan per tonne, up 20 yuan per tonne on the week. Soybean meal cash prices rose 75 yuan per tonne to 3,080 yuan per tonne. The soybean meal-peanut meal spread widened to 80 yuan per tonne from 25 yuan the prior week, as soybean meal outpaced peanut meal.

Supply

Peanut Inventories: For the week ending August 20, 2026, peanut inventories at sampled domestic peanut oil enterprises totaled 183,340 tonnes, a decrease of 24,670 tonnes or 11.86% from the previous week, marking a continued decline.

Peanut Oil Inventories: As of August 20, 2026, peanut oil inventories at sampled enterprises stood at 43,400 tonnes, down 330 tonnes or 0.75% week-on-week.

Import Volume: July imports of in-shell peanuts totaled 24,000 tonnes, lower than June's 34,500 tonnes but above the 500 tonnes imported in the same period last year. Cumulative January-July in-shell imports reached 95,300 tonnes, higher than the 38,300 tonnes in the same period last year. July imports of shelled peanuts were 44,600 tonnes, up from 16,700 tonnes in June and 9,100 tonnes a year earlier. Cumulative January-July shelled imports hit 164,300 tonnes, above the 75,300 tonnes in the same period last year. Converting in-shell peanuts at a 70% yield, July combined imports (in-shell and shelled) equate to 61,500 tonnes, up from 40,900 tonnes in June and 9,400 tonnes in the same period last year. Cumulative January-July imports reached 257,800 tonnes, an increase of 155,700 tonnes year-on-year.

Demand Side

Peanut Crushing Margins: As of August 21, theoretical peanut crushing margins in Shandong turned positive at 95 yuan per tonne, up from -8.09 yuan per tonne the previous week, as a rebound in peanut meal prices swung crushing operations back to profitability.

Crushing Profit Improves: Peanut crushing margins have improved.

Crushing Operating Rate: As of August 20, 2026, the operating rate at sampled domestic peanut oil enterprises was 20.16%, unchanged from the previous week but up 15.42% year-on-year.

Weather

Weather forecasts for Zhumadian, Kaifeng, Nanyang, Hebi in Henan; Linyi and Qingdao in Shandong; Huludao and Fuxin in Liaoning; and Songyuan in Jilin include soil moisture data for these regions. Over the next 10 days (August 23-September 1), China will experience two main rainfall zones. The northern zone, covering parts of Northwest China, North China, and the Northeast, will see cumulative precipitation of 30-80 mm, with localized areas exceeding 100 mm. The southern zone, primarily in South China and southeastern Jiangnan, will receive 100-200 mm, with coastal areas surpassing 300-400 mm. Additionally, parts of southwestern China, western Jiangnan, and southern regions will see 50-80 mm, with some areas reaching 100-150 mm. Precipitation in most of these regions will be 50-100% above normal, with some areas exceeding 200% above average. In the following 11-14 days (September 2-5), rainfall of 20-40 mm is expected across the Qinghai-Tibet Plateau, southwestern China, and southern South China, with some areas receiving 50-90 mm and localized amounts of up to 100 mm or more.

Author: Nie Bo | Futures Practitioner License: F03117695 | Investment Advisory License: Z0019358 | Contact: niebo@zjtfqh.com