Protein Meal

On Monday, CBOT soybeans traded on a strong note, tracking gains in the broader market. The reduced expectation of a US Federal Reserve interest rate hike, along with a weaker US dollar, provided support to commodities. The timely rainfall in major US soybean production areas from late July to early August injected vitality into crop growth. The market is closely monitoring weather conditions in the production areas for August, with some institutions forecasting that if precipitation remains favorable, US soybeans could achieve a high yield. On the domestic front, protein meal prices rose in a volatile pattern, tracking fluctuations in import costs. Data from SteelMysteel shows that inventories of soybeans and soybean meal at domestic oil mills increased last week, while unexecuted contracts also rose. The upcoming auction of imported soybeans on August 12 will be closely watched for transaction results, as the supply-demand landscape for soybeans is expected to remain ample. The market continues to focus on production area weather, the pace of domestic protein meal inventory accumulation, and the upcoming USDA supply and demand report.

Oils and Fats

On Monday, BMD palm oil rose, tracking gains in the broader market. MPOB data revealed that Malaysia's palm oil inventory in July climbed to 2.63 million tons, slightly above market expectations. This was due to production growth outpacing export demand and a slowdown in domestic consumption. Shipping data shows that Malaysia's palm oil exports for the first ten days of August increased by 2.6% to 14.8% compared to the previous period. Recently, rainfall in major palm oil producing regions has decreased, and the expectations for a super El Niño event continue to intensify, creating a standoff between the risk premium from distant weather conditions and the near-term pressure of inventory accumulation. Domestically, despite the bearish MPOB report, the domestic market responded calmly as the data was largely anticipated. The spot market for oils and fats continues to face inventory accumulation pressures. SteelMysteel data shows that inventories of soybean oil and palm oil continued to rise last week. However, spot prices remain firm, supported by market expectations of pre-holiday stocking demand in late August. Oils and fats prices are exhibiting a volatile, slightly stronger trend. The market will continue to monitor the shipping situation in the Strait of Hormuz and the consumption of oils and fats in the coming period.

Live Hogs

On Monday, live hog futures traded with a strong bias, with open interest declining compared to the previous trading day. The main 2611 contract oscillated upward during the session, experiencing a pullback at the close, ultimately settling 1.12% higher at 12,170 yuan per ton. On the spot market, Zhuochuang data shows that the national average live hog price was 10.81 yuan per kilogram yesterday, up 0.34 yuan per kilogram from the previous day. In the benchmark delivery area of Henan, the average price was 10.8 yuan per kilogram, up 0.18 yuan per kilogram. Prices rose in Sichuan, Liaoning, Shandong, and Guangdong. The supply of large-bodied hogs is relatively tight. With the price spread between fat and lean hogs gradually widening, the tendency for farmers to hold back and increase weight for sale has strengthened. Low-priced procurement from downstream sources is not smooth, leading to price increases. The synchronous upward movement of futures and spot markets suggests a continued strong performance in the short term.

Eggs

On Monday, egg futures pulled back. The main 2610 contract rebounded in early trading but fluctuated lower in the afternoon, closing 1.49% lower at 3,904 yuan per 500 kilograms. On the spot market, Zhuochuang data shows that the national egg price stood at 4.59 yuan per jin yesterday, up 0.1 yuan per jin from the previous day. In the production areas, the price of pink-shelled eggs in Ningjin was 4.5 yuan per jin, up 0.1 yuan per jin, and the price of brown-shelled eggs in Heishan market was 4.3 yuan per jin, up 0.1 yuan per jin. In the consumption areas, the price of brown-shelled eggs in Puxi was 4.69 yuan per jin, up 0.11 yuan per jin, and the price of brown-shelled eggs in the Guangzhou market was 4.95 yuan per jin, up 0.02 yuan per jin. Downstream procurement demand was stable. Driven by production area prices, the cost to consumption areas increased, leading to a continued rise in spot egg prices. As temperatures drop later in the season, demand will gradually enter the peak third quarter, creating expectations for a spot price rebound. After a recent low-level rebound, futures prices are now undergoing volatile adjustments. Market sentiment and the sustainability of the rebound will be key points to watch.

Corn

On Monday, corn futures prices rose with declining open interest. The near-month 2609 contract saw a reduction of over 80,000 lots, while the weighted contract decreased by about 50,000 lots, with prices trending upward. Today, corn prices in the northeastern production areas continued to decline. The availability of multiple alternative energy feed ingredients at low prices is having a negative impact on the northeast corn market. In the North China region, corn prices were generally stable, with some local areas experiencing both increases and decreases ranging from 6 to 10 yuan per ton. Following a period of sustained price declines, grain supplies have been largely absorbed. Additionally, influenced by typhoon activity, there is increased rainfall in North China this week, which is supportive for corn prices. Concentrated sales by traders have decreased, and the number of vehicles arriving at deep processing enterprises remains low. Some enterprises have slightly raised prices, while others have made minor reductions based on their own circumstances. In the sales regions, the corn market is quoted as stable to slightly weaker, with the center of gravity moving down slightly. Spring corn has begun to be harvested and enter the market, further enriching the supply in the sales regions. Terminal livestock farming profitability is poor, and with substitutes continuing to erode corn's market share, and in the absence of positive catalysts, corn prices are expected to continue their weak, volatile trend. In the futures market, corn prices rose this week at the start with declining open interest. Policy support for the wheat market provided some support for corn futures prices. The agricultural products sector stabilized in a linked manner, leading to stronger volatile trading in both near-month and deferred contracts of corn.