EAN OIL & Agricultural Commodities Market Recap

Beans, Oils, and Cotton Update

On November 21st, CBOT Soybeans for January closed at 980.75 cents/bushel, down 10.25 cents (-1.03%). CBOT Soymeal for January closed at $289.7/short ton, down $2.1 (-0.72%). CBOT Soyoil for January closed at 42.34 cents/pound, down 1.02 cents (-2.35%). NYMEX Crude Oil for January closed at $70.13/barrel, up $1.09 (+1.58%). BMD Palm Oil for February closed at 4769 Malaysian ringgits/ton, down 48 ringgits (-1.00%); overnight, it fell an additional 61 ringgits (-1.28%).

DCE Soymeal for 2505 closed at 2822 yuan/ton, down 5 yuan (-0.18%); overnight, it fell 20 yuan (-0.71%). DCE Palm Oil for 2501 closed at 9556 yuan/ton, down 398 yuan (-4.00%); overnight, it rose 22 yuan (+0.23%). DCE Soyoil for 2501 closed at 8112 yuan/ton, down 128 yuan (-1.55%); overnight, it fell 74 yuan (-0.91%). CZCE Rapeseed Oil for 2501 closed at 9196 yuan/ton, down 162 yuan (-1.73%); overnight, it fell 214 yuan (-2.33%). CZCE Rapeseed Meal for 2501 closed at 2315 yuan/ton, down 41 yuan (-1.74%); overnight, it fell 87 yuan (-3.76%).

News Highlights:

On November 20th, China and Brazil signed 38 cooperation agreements covering agriculture, trade, investment, infrastructure, industry, and energy.

USDA's export sales report showed net sales of 1.8606 million tonnes of soybeans for 2024/25, up 20% from the previous week and down 7% from the four-week average. Sales to China increased by 1.197 million tonnes.

South American soybean-producing regions have favorable weather. Temperatures in Brazil's main producing areas are near normal, and Argentina is also trending normally.

GAPKI reported that Indonesia's palm oil inventories rose in September due to lower exports and domestic consumption coupled with a slight increase in production.

Summary:

Markets have shifted focus to Trump's pre-inauguration remarks, appointments, and potential adverse effects on soybeans. Brazil's soybean planting progresses smoothly, and the probability of La Niña has been further downgraded, leading to consecutive declines in CBOT Soybeans. Focus on the actual impact of Trump's policies on soybean exports and Brazil's soybean production.

Soyoil significantly declined, driving domestic prices down. The NOPA report provided only temporary support. BMD Palm Oil fell amid expectations of lower exports and Indonesia's rising inventories. In the context of palm oil's driving logic remaining unproven and entering a seasonal production decline, focus on funds' expectations for absolute prices and soybean-palm oil price spreads.

Cotton Market Recap:

ICE cotton futures rose, touching a weekly high, due to strong weekly export sales data. The March contract rose 0.15 cents, or 0.2%, to settle at 70.43 cents/pound.

Chinese cotton futures also rose slightly. The January contract gained 45 points to close at 13975 yuan/ton, with open interest decreasing by over 5,000 contracts. The May contract closed up 40 points at 14020 yuan/ton.

Industry News:

US weekly net signings of 2024/25 upland cotton increased significantly, with China being one of the top buyers. Pakistan's cotton imports in October surged by 77.8% MoM and 368.8% YoY.

As of November 20th, Xinjiang's cotton processing total reached 3.5515 million tonnes, up 23.99% YoY.

On November 21st,郑棉registered warehouse receipts decreased by 1906 contracts, with new-crop warehouse receipts holding steady.

Spot Market:

In Xinjiang, 2024/25 machine-picked cotton of grade 3128B with impurity below 2.7% sold at a basis of around 700 yuan/ton to the January contract, with a transaction price of around 14540 yuan/ton. In the inland regions, Hebei's new cotton of grade 31, double 28, with impurity below 2% arrived at factories at 14300-14400 yuan/ton.

Market Outlook:

Cotton prices have risen amid valuation corrections, macroeconomic factors, and industry fundamentals. However, domestic macroeconomic support for commodities needs fiscal policy follow-up and time to materialize. Commodity prices, after a round of valuation corrections and macroeconomic gains, will return to fundamentals and differentiate. For cotton, supply and demand need to genuinely improve. Macroeconomic trends suggest a potential stage bottom, but production exceeding expectations weighs on upside potential. Overall, expect range-bound trading, awaiting further macroeconomic developments.

Sugar Market Update:

Data Update:

Zhengzhou Sugar's January contract closed at 5971 yuan (up 40 yuan), with open interest increasing by over 30,000 contracts. Overnight, it closed at 5965 yuan (down 6 yuan), with open interest increasing by over 1,000 contracts.

ICE raw sugar opened at 21.7 cents and closed at 21.37 cents, down 0.28 cents (-1.29%).

Guangxi's spot sugar price index was 5945 yuan (up 57 yuan).

News:

As of November 19th, 52 ships were waiting to load sugar at Brazilian ports, down from 62 the previous week.

China imported 224,800 tonnes of syrup and pre-mixed white sugar in October, down 21.12% MoM but up 32.25% YoY.

Summary:

Internationally, raw sugar faces pressure from Northern Hemisphere production increases and a rising US dollar. Domestically, sugar prices are supported by higher syrup import costs due to currency depreciation. Focus on syrup import control policies.

Pig Market Update:

On November 21st, the average price of outer-three-yuan pigs nationwide was 16.37 yuan/kg, up 0.15 yuan/kg from the previous day.

In the futures market, total open interest increased by 1692 contracts to 144,335 contracts.

Summary:

Spot prices fluctuate, with breeding operations maintaining high prices. Consumption increases slightly due to colder weather and lower pork prices, but slaughterhouses are hesitant to accept higher-priced pigs. In the medium term, pig supply is recovering, and inventories are cautiously accumulating. Futures contracts for next year are primarily short, but the market has priced in悲观预期, limiting trading space. Focus on breeding sentiment, demand, disease, and capital movements.

(Source: Yong'an Futures)