Caixin Futures: Agricultural products fluctuate with a strong bias; rapeseed oil rises nearly 4% as overseas weather boosts positions

⑴ Oils & Fats: Fluctuating with a slight upward trend. Weather disturbances in overseas rapeseed-producing regions have fueled bullish sentiment in rapeseed oil, with the main contract closing up 3.94% at 10,353 yuan/ton and open interest surging by 96,000 lots. Internationally, continued high temperatures and low rainfall in Europe, reduced sowing and output forecasts for new-season rapeseed in Australia, and ongoing delays in Canadian rapeseed planting have heightened concerns over reduced new crop production, strengthening international rapeseed costs and supporting rapeseed oil prices. Domestic rapeseed oil inventories remain at historically low levels; as Canadian rapeseed arrivals increase, supply is expected to loosen, with downstream buyers making purchases only as needed. In the short term, the market is primarily driven by overseas weather factors. On the spot market, 24-degree palm oil in Guangdong rose 30 yuan to 9,620 yuan, soybean oil fell 10 yuan to 8,810 yuan, and genetically modified rapeseed oil in Jiangsu increased by 220 yuan to 10,580 yuan.⑵ Soybean Meal: Favor short positions on rallies or consider spread trades. The pressure from imported soybeans arriving at domestic ports continues, crushing activity at oil mills is recovering, and soybean meal inventories are continuing to build up. On the demand side, deep losses in live hog farming and relatively abundant feedstock inventories at feed enterprises have curtailed speculative stockpiling, leaving the domestic market in a strong supply and weak demand pattern, with spot prices remaining weak. The recommended approach is to maintain short positions on rallies.⑶ Corn: Favor short positions on rallies. Today, corn futures rose initially then fell, mainly due to news on June 5 about corn being released from reserves, which prompted the decline. The fundamental picture hasn’t changed: grain supplies are still mostly held by suppliers with strong price support intentions, but the launch of sprouted wheat and wheat onto the market increases overall grain supply pressure. Downstream enterprises have sufficient inventories and typically purchase as needed. The arrival of wheat onto the market reduces corn demand from downstream industries. Given strong supply and weak demand, spot corn prices remain under pressure and are trending weak.⑷ Live Hogs: Consider spread trades. Today, live hog futures rebounded sharply, largely due to production cuts by major groups and secondary fattening entering the market to support spot prices; it remains to be seen whether this can continue. Fundamentals show some marginal improvement, but the degree is slight and the basic pattern hasn’t changed. However, companies’ planned slaughter volume for June is down slightly month-on-month, with little change in average slaughter weights. Overall supply is expected to contract somewhat, while short-term demand remains flat. Live hog futures are expected to remain volatile in the short term.⑸ Eggs: Consider long positions on spreads. Over the weekend, spot egg prices posted large increases, pushing futures prices higher today, with the JD2606 and JD2607 contracts closing at their daily limit. In the short term, low egg inventories, combined with increased stockpiling demand ahead of the Dragon Boat Festival, could make it easy for egg prices to rise and difficult for them to fall. However, a significant increase in chick replenishment in February means the number of laying hens may recover mid-term, which could to some extent limit further price gains. Additionally, current farming profits have increased significantly compared to the same period last year, so caution is advised.