Caixin Futures: Palm oil fluctuates, soybean meal remains bearish, corn faces pressure, policy interventions increase in live hog market

⑴ In the agricultural products sector, palm oil mainly fluctuates, soybean meal and corn trend bearish, live hogs are affected by policy disruptions, and eggs are running firmly. ⑵ Regarding palm oil, Indonesia’s planned export control framework policy will come into effect in January 2027. This policy may increase transaction review intensity and disrupt trade flows. After the announcement, domestic fruit bunch prices in Indonesia dropped sharply, combined with falling international crude oil prices, resulting in collective reversal of gains in edible oils. Current bottom-fishing behavior at the 60-day moving average for edible oils is regarded as short-term speculation, with fundamentals themselves not supporting sustained price increases. In the spot market, 24-degree palm oil in Guangdong dropped by 80 yuan to 9,400 yuan, soybean oil fell by 50 yuan to 8,770 yuan, and genetically modified rapeseed oil in Jiangsu dropped by 20 yuan to 10,080 yuan. ⑶ On the international side of soybean meal, the China-US presidential meeting did not see large procurement news. US soybean domestic crushing in April was below expectations, and with South America’s abundant harvest coming to market, there is no short-term upward driver for US soybeans. Domestically, imported soybeans continue to arrive under sustained pressure, oil factory operating rates are rising, and soybean meal inventories keep accumulating. On the demand side, deep losses in live hog farming mean feed enterprises focus only on essential stocking, lacking speculative replenishment. The supply-strong and demand-weak situation remains unchanged, and futures and spot prices continue to run weak. Maintain a strategy of shorting on highs. In terms of arbitrage, record harvests in Brazilian soybeans and reduced production expectations for US soybeans in 2026/27 create a weak-near strong-far pattern, and domestic arrivals will gradually increase in the coming months, continuing the accumulation rhythm in soybean meal stocks, making it possible to enter reverse arbitrage. For options, consider selling out-of-the-money call options. ⑷ For corn, the main contracts have recently been fluctuating at high levels, lacking clear direction. With new wheat coming to market, some grain traders are clearing inventory, causing a recent increase in corn shipments. However, downstream demand improvement is insufficient, and overall market trade remains subdued. Under a supply-strong and demand-weak scenario, fundamentals are bearish. Combined with rumors of upcoming rice auctions in the market, corn futures and spot prices are further bearish; pay attention to subsequent rice auction developments. On the single-side, rice auctions will increase the substitution effect of corn supply, making shorting on highs the main operation, but the amplitude is expected to be limited—closely follow auction policy trends. There is no clear driver for arbitrage, so it is recommended to wait and see. ⑸ In the live hog sector, on May 19 the Ministry of Agriculture and Rural Affairs convened a video meeting for comprehensive production capacity regulation, emphasizing "all localities must raise political awareness, strictly implement capacity reduction measures, and promote a reasonable rebound in hog prices", and will "send seven working groups to main hog-producing provinces to ensure effective implementation of policies". This led to shorts exiting in the afternoon session and prices rising. It is recommended to closely monitor the specific path to achieve the normal capacity of 37.5 million heads after adjustment.