On Monday, CBOT soybeans settled higher, propelled by an accelerated soybean crushing pace and firmer crude oil prices. NOPA data revealed that US soybean crushings in July reached 216.647 million bushels, marking an increase on both a monthly and annual basis. This week, Pro Farmer is conducting its annual crop tour, with market participants closely monitoring the findings for fresh insights into potential yields. Post-market crop reports indicated the US soybean condition rating at 61% good-to-excellent, down from the previous week's 62%.
In the domestic market, protein meal followed the broader market with a firm-to-higher range-bound trade. A broad-based rally across commodities, led by chemicals and metals, saw agricultural products tracking higher. However, cash market activity for protein meal remained cautious, with prices showing signs of stagnation. Weather forecasts suggest the possibility of heavy or extreme rainfall in Northeast China during mid-August, keeping the market attentive to potential crop impacts. With a mix of bullish and bearish factors, soybean meal is likely to continue its consolidation pattern.
In the edible oils sector, BMD palm oil touched a four-and-a-half-month high on Monday, buoyed by El Ni帽o climate risk concerns. Some market participants are positioning for potential supply tightness into 2027, anticipating that El Ni帽o-related weather patterns could pressure palm oil production. Shipping data indicated that Malaysia's palm oil exports for August 1-15 ranged from a 7.9% decline to a 3.2% increase month-on-month, with the cautious export figures capping price gains.
Domestically, oil prices traded with strength, with gains in crude oil and overseas markets lending support to the complex. Rapeseed oil and palm oil outperformed soybean oil. Spot price increases lagged behind futures, reflecting stagnation due to high inventory pressure and limited downstream demand. The oils market is expected to maintain a near-term weak, long-term strong structure, with market focus remaining on the Strait of Hormuz transit situation and edible oil consumption trends.
In the live hog market, the main 2611 contract experienced a volatile session, rallying in the afternoon before retreating, ultimately closing up 0.69% at 12,400 yuan/ton. Cash market data showed the national average hog price at 11.16 yuan/kg, up 0.3 yuan/kg from the previous day. In the benchmark delivery region of Henan, the average price stood at 11.4 yuan/kg, an increase of 0.4 yuan/kg. Prices in Sichuan, Guangdong, Liaoning, and Shandong all saw varying degrees of gains. With robust downstream demand and good sell-through at farms, slaughterhouses have been raising prices to secure volumes, keeping cash prices on an upward trajectory. Following a sustained futures rally, the pace of gains has moderated, with attention now on cash market performance and shifting market sentiment.
For eggs, futures traded in a narrow, slightly weaker range on Monday, with the main 2610 contract closing down 0.71% at 3,929 yuan/500 kg. Spot data indicated the national average egg price at 5.14 yuan/jin, up 0.04 yuan/jin from the prior day. In production areas, Ningjin's pink-shell eggs held steady at 5 yuan/jin, while Heishan's brown-shell eggs rose 0.1 yuan/jin to 4.9 yuan/jin. In consumption areas, Puxi's brown-shell eggs increased 0.11 yuan/jin to 5.24 yuan/jin, and Guangzhou's brown-shell eggs gained 0.1 yuan/jin to 5.35 yuan/jin. Active downstream purchasing has bolstered spot egg prices, which are expected to remain firm, supported by peak season demand. Futures continue to trade in a wide range, with market focus on spot price trends and sentiment shifts.
In the corn market, Monday saw positions reduced and prices decline as futures underwent a corrective adjustment. The main 2611 contract saw open interest expand by 163,000 lots as prices came under pressure, with bearish sentiment intensifying. Over the weekend, corn prices in Northeast China remained largely stable with little change in market activity. With futures prices for distant months at relatively low levels, traders have shown a willingness to sell, though channel inventories in the Northeast remain substantial. The overall supply situation appears relatively loose, suggesting limited room for price improvement in the near term.
In North China, corn prices were broadly stable over the weekend with some localized narrow adjustments. Traders are inclined to sell, while downstream deep-processing enterprises are controlling their purchasing pace. Combined with the anticipated arrival of spring corn, supply remains ample, keeping prices in a weak consolidation pattern for the short term. In the consumption areas, corn prices saw narrow, range-bound fluctuations with a softer bias over the weekend. With no significant improvement in breeding profitability, enterprises are reluctant to build inventories, generally adhering to a hand-to-mouth purchasing strategy. The market lacks a clear upward catalyst, leaving both buyers and sellers in a wait-and-see mode, and the consumption-area corn market is likely to continue its narrow, weak consolidation trend.
Overall, the August USDA report was seen as bullish, with US corn leading gains and pulling wheat higher. In the domestic market, ample substitutes in the grains sector, combined with position reduction in the corn weighted contract, point to continued range-bound trading. Corn prices are expected to weaken first before strengthening ahead of the new crop harvest.