CITIC Jiang Tou Futures: Agricultural Products Morning Report March 23

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Corn: Neutral to Slightly Bullish

1. Market Performance: Last week, the May corn contract continued to fluctuate mildly bullish, but upward momentum weakened. The main May contract closed at 2,385 yuan/ton. During the week, futures prices surged then retreated, with the March 9 main contract reaching a high of 2,443 yuan/ton, setting a new short-term peak, before entering a phase of consolidation.

2. Spot and Channel Conditions: Over the next two days, China Grain Reserves Corporation plans to stockpile a total of 460,000 tons, marking a small peak in storage activity. As of last Friday (3.13), nationwide deep-processing corn inventories stood at 3.377 million tons, down 37.8% from the high of 5.438 million tons in early February, continuing a four-week decline. The replenishment window is closing. Regarding purchase prices, low inventories combined with persistently low delivery volumes have forced deep-processing enterprises to passively raise prices, expanding the range of price increases: the average nationwide corn price is 2,413 yuan/ton, up 30 yuan/ton from the previous week; mainstream purchase prices in Shandong deep-processing plants are between 2,360-2,460 yuan/ton, with some exceeding 1.2 yuan per jin; in Northeast China, main purchase prices for wet grain are between 2,200-2,320 yuan/ton.

3. Market Outlook & Summary: Limited residual grain at the grassroots level plus policy support suggest short-term bullishness for corn. However, improved weather may gradually increase supply, and profit pressures on deep-processing companies could limit price hikes. Feed demand remains weak, potentially slowing the pace of gains. Support levels are around 2,350 yuan/ton, with resistance at approximately 2,420 yuan/ton. The overall strategy remains mildly bullish, with focus this week on policy grain releases, wheat substitutes, and import price changes.

Soybean Meal: Neutral to Slightly Bearish

1. Geopolitical narratives continue to transmit through energy, fertilizer, and other supply chains to agricultural products, with short-term attention on the sustainability of geopolitical trades. In the medium term, rising prices of fertilizers, pesticides, and fuels increase planting costs for U.S. soybeans, somewhat raising the long-term CBOT soybean price center. However, expectations of increased soybean acreage in the U.S. also somewhat mitigate the risk premium associated with weather disruptions.

2. Reuters citing Brazil’s Globo Rural reports that the Brazilian Ministry of Agriculture’s documents show China has suspended zero-tolerance policies on weeds in imported soybeans, which market interprets as a temporary delay in Brazilian soybean arrivals being invalidated. If subsequent soybean arrivals proceed smoothly, domestic supply remains relatively ample, possibly leading to a correction in soybean meal futures prices. Market will monitor actual arrival data.

Summary of Viewpoints: Intraday, prices may trend weakly, but stabilization in U.S. markets limits downside potential.

Eggs: Neutral

Spot prices in main producing regions remain stable. Hebei Guantao’s spot price is 3.06 yuan/jin, unchanged from the previous day. Short-term market lacks clear drivers, with prices mainly fluctuating within a range. Marginal improvement in supply-demand balance is expected in Q2. Considering easing production pressures, there may be structural buying opportunities later this year. Rising costs of corn and soybean meal have pushed the weekly feed cost per jin of eggs to around 3.17 yuan, providing solid cost support during the off-season.

Summary of Viewpoints: Consider deploying during dips towards the end of Q2 and the peak season in Q3.

Pork: Neutral

Live pig prices are fluctuating weakly. Yesterday, the average spot price in main production areas was 9.81 yuan/kg, down 0.06 yuan/kg from the previous day. On the morning of March 19, relevant departments held a meeting requiring pig enterprises to report annual production targets and make reduction commitments, including reducing the number of breeding sows and slaughtering volumes. The national average price has fallen below the psychological threshold of 10 yuan/kg, causing market panic selling. Under ongoing pressure from spot prices, the industry is entering a passive accumulation phase. From the contract structure perspective, nearby contracts are more affected by spot supply and demand, while longer-term contracts, though supported by expectations, cannot offset the overall weakness driven by recent declines. The strategy of short-term bearish and long-term bullish remains, with opportunities to buy on dips for future rebounds.

Summary of Viewpoints: Short-term prospects are bleak, but focus on capacity reduction in longer-term contracts, maintaining a buy-on-dip approach.

Risk Warning: This information is analyzed by the research and development team of the futures company. All data is sourced from publicly available information. CITIC Construction Investment Futures strives for accuracy but does not guarantee the correctness or completeness of this information. Trading based on this information is at your own risk. This report does not constitute personal trading advice and does not consider individual client’s specific trading goals, financial situation, or needs. Clients should consider whether any opinions or suggestions herein are suitable for their particular circumstances. (Wei Xin, Futures Trading Consultant ID: Z0014814; Liu Hao, Futures Trading Consultant ID: Z0021277; Deng Haoran, Futures Trading Consultant ID: Z0023357)

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Editor: Zhao Siyuan