Caixin Futures: Divergent Trends in Agricultural Products, Oils Rebound After Bottoming, Soybean Meal Strengthens

⑴ Today, the oil and fat sector rebounded after hitting a low, with main contracts all standing above the 5-day moving average. However, overall trading volume shrank while open interest increased, indicating a weak recovery. The rebound is essentially more influenced by the substitution effect of crude oil. ⑵ In terms of varieties, palm oil held the key support at 9,400 yuan/ton, and soybean oil also stabilized at the critical level of 8,400 yuan/ton. In the short term, attention should be paid to whether the previous high resistance levels are realized. In the spot market, Guangdong 24-degree palm oil rose by 120 yuan to 9,450 yuan/ton, soybean oil increased by 10 yuan to 8,840 yuan/ton, and Jiangsu GMO rapeseed oil rose by 70 yuan to 10,280 yuan/ton. ⑶ Overall, confidence in the current oil and fat market has not fully recovered. It is recommended to remain cautious in operations and focus on the effectiveness of key support levels. ⑷ Regarding soybean meal, the surge in crude oil has driven vegetable oils higher, which in turn has increased the cost of imported soybeans. This is the main logic behind the strength of soybean meal. Additionally, the hedging demand for agricultural products is also an important factor in their recent strength. Therefore, in the short term, soybean meal is expected to mainly follow the developments in the Middle East conflict and move passively. ⑸ Domestically, soybean meal inventories remain high, and supply pressure persists. However, the rate of pressure reduction is relatively fast, which supports the strong performance of soybean meal on a month-on-month basis. ⑹ For corn, the main logic behind its strong price performance is that inventories at northern ports are still relatively low year-on-year. However, losses among downstream enterprises and warmer weather, which is unfavorable for corn storage, may limit the momentum for further short-term price increases. From a valuation perspective, current corn prices are already relatively high. Attention should be paid to the pace of grain sales by farmers after the New Year and information on national reserves auctions. It is recommended to focus on buying on dips after a pullback. ⑺ Regarding live hogs, although the sow inventory has declined month-on-month, the absolute value remains above the normal retention level. Coupled with excellent production performance, supply is expected to remain high in the medium term. In the short term, the second round of fattening before the New Year has not been fully digested, and slaughtering is gradually recovering, so supply remains strong. Together with extremely weak demand after the New Year, spot prices continue to weaken. It is recommended to focus on short positions at high levels and pay attention to changes in slaughter volume. ⑻ For eggs, post-New Year sales have recovered slowly, and logistics have not fully resumed, with local sales in production areas dominating. From the perspective of supply and demand, supply remains high in February and March, and terminal demand is in the off-season. It is recommended to focus on short positions at high levels and pay attention to the pace of inventory replenishment by traders.