Galaxy Securities: El Niño Drives Soybean Meal, Oil and Sugar Stronger, Corn, Live Hog and Cotton Fluctuate

Galaxy Securities research report states that a super El Niño has formed. Looking ahead, it is expected that in the near term, soybean meal, rapeseed meal, the three major oils, and sugar will remain relatively strong, while corn, live hogs, and cotton will experience fluctuations. The main focus is on the forward weather premium injected by the ultra-strong El Niño, combined with the import cost increase following the "all bearish news has been priced in" for U.S. soybeans, leading to a relatively strong price trend. Soybean meal is supported by the exhaustion of negative news, temporarily tight domestic supply, and weather premium, all resonating for overall strength. Rapeseed meal tracks the performance of soybean meal. Oils receive triple support: weather premium, strong crude oil benefiting biodiesel, and the end of bearish news for U.S. soybeans raising the cost of oilseeds. Sugar is driven by the global production cut expectations ignited by El Niño, with stronger raw sugar prices and narrowing domestic-foreign price differentials, thus supporting and increasing the import cost for Zhengzhou sugar. Each of the fluctuating products faces its own contradictions: corn faces the game between new grain entering the market and state reserve purchases, with attention needed to the pace of storage purchases and opening price for new grain; live hog supply remains ample, and a rebound would require the start of preserved meat demand or concentrated entry for secondary fattening as catalysts; cotton faces pressure from new cotton supply above and cost support from procurement below, with its direction depending on seed cotton purchase prices, procurement progress, and whether peak season orders are delivered.