Oils and Oilseeds: No shortage of supply in Q4, but concerns about supply emerge in the first half of 2027 (Hou Xueling, Practitioner License No.: F3048706; Trading Advisory License No.: Z0013637). Driven by bullish factors including weather, inflation expectations, high oil prices, and biodiesel, domestic and international oils and oilseeds operated strongly in Q3, with international performance stronger than the domestic market and futures markets outperforming spot markets.
On the soybean front, the September 26 Washington meeting between Chinese and U.S. heads of state issued an "Eight-Point Consensus," with agricultural products explicitly listed first on China's tariff reduction list for the U.S., and an agricultural market access working group established for the first time, benefiting Sino-U.S. agricultural trade volumes. A specific list was released on September 28, which will set the tone for U.S. soybean exports, with key focus on whether the commercial purchasing window for U.S. soybeans can open. In Q3, driven by U.S. biodiesel policy, U.S. soybean crush volumes maintained year-on-year growth of over 10%. The Q4 outlook for U.S. soybean crushing remains optimistic, though the magnitude will be affected by the redistribution of 1.76 billion RINs allocated to small refineries exempted in 2025 and 2027 biodiesel policy, among other factors. U.S. soybean harvesting progressed slowly in September but is expected to accelerate in October, with a favorable production outlook and harvest pressure gradually materializing.
Meanwhile, the soybean market's focus is shifting to South America, where El Ni帽o weather and rising planting costs have slowed the pace of Brazilian soybean area expansion, making the market highly sensitive to yields. Key attention should be paid to the impact of October-November weather on Brazilian soybean production; if weather conditions are unfavorable, concerns about 2027 soybean supply will intensify. Argentina's soybean production is expected to increase, with both area and yield revised upward, presenting a relatively optimistic picture.
Domestically, Q4 soybean arrivals are estimated at approximately 27 million tonnes. If the 10% retaliatory tariff on U.S. soybeans is removed, Q4 soybean supply pressure will further increase. Demand-side absorption capacity is limited, with continued losses in hog farming, accelerated culling of breeding sows, reduced soybean meal inclusion rates in feed, and increased pre-sale ratios, all pointing to marginally weaker soybean meal consumption. Protein meal in Q4 may present a pattern of "oscillating upward plus weak basis."
On the oils side, Q4 palm oil supply pressure from producing regions declines seasonally, and the El Ni帽o impact will materialize in the first half of next year, gradually alleviating forward supply pressure for palm oil. South American soybean oil continues to be exported, though incremental volume is limited. Russia and Ukraine have bumper sunflower seed harvests, but due to the Russia-Ukraine conflict, logistics remain disrupted, resulting in depressed domestic prices, widened domestic-international price spreads, and deferred supply pressure. Overseas oils supply varies significantly across regions.
Indonesia's B50 program and U.S. soybean oil biodiesel represent the strongest overseas oils consumption areas, followed by South American soybean oil. India is one to watch, having lowered tariffs on September 24, with the largest reduction on sunflower oil and larger cuts on crude oil than refined oil, and Indian oils procurement is expected to improve. Malaysia faces significant supply pressure. China's import profitability opens periodically, with palm oil, Canadian rapeseed, Australian rapeseed, and Russian imports at medium-to-high levels, ensuring ample Q4 oils supply. As demand enters its seasonal peak and overseas palm oil supply tightens alongside potential uncertainties in South American soybean oil, domestic oils supply pressure will gradually ease, supporting the basis. Overall, domestic and international oils supply is generally ample, but localized "phased and structural" tightness risks exist, with divergent trends among varieties and a "strong overseas, weak domestic" pattern likely to persist. Oils price centers and bases are expected to gradually move upward. The tight supply situation for domestic rapeseed oil is expected to improve, while the market continues to digest high palm oil and soybean oil inventories.
Eggs: After the peak season, egg prices undergo seasonal correction (Kong Hailan, Practitioner License No.: F3032578; Trading Advisory License No.: Z0013544). 1. In Q3, egg futures prices generally oscillated on the weak side. In late June, under optimistic expectations for the end of the plum rain season in the south and the gradual approach of the peak season, futures prices rebounded, with the rally lasting into early July. On July 10, the egg weighted index hit an intraday year-high of 4,447 yuan per 500 kg. In mid-July, as peak-season bullish factors had already been priced in and no new bullish factors emerged from the farming side, egg futures prices continued to retreat. During this phase, futures continued to weaken while spot prices continued to rise, and the basis continued to widen. Entering September, under basis convergence, futures staged a modest rebound at low levels before oscillating and adjusting.
2. In Q3, egg spot prices overall showed an upward trend. In late June and early July, egg spot prices rebounded from low levels, with the rally lasting one month before a pullback at the end of July. As southern regions gradually exited the plum rain season and end-user demand recovered, spot prices began to rise in August. Entering August, egg spot prices generally maintained an upward trend and gradually entered the peak season. On September 16, prices reached the annual high of 5.36 yuan per jin, up 1.01 yuan per jin from the late-July low. Recently, as the Mid-Autumn Festival approaches, food processing companies have finished stockpiling, the peak season is gradually winding down, and spot prices have pulled back from highs. As of September 24, the daily average price of Chinese brown-shell eggs stood at 4.89 yuan per jin, down 0.47 yuan per jin from the September 16 high.
3. On the supply side, in August 2026, laying hen inventories stood at 1.282 billion birds, down 0.23% month-on-month and down 6.08% year-on-year. According to flock age structure data, old hens awaiting culling accounted for 10.13%, marking the eighth consecutive month of month-on-month increases and up 1.26 percentage points from the same period last year. The relatively large proportion of old hens awaiting culling corresponds to poor laying rates. As of September 15, the semi-monthly laying rate stood at 90.99%, below the same period last year. As a result, the supply side provides support for egg spot prices. Old hen culling volumes declined for two consecutive weeks month-on-month, but remain at historically high levels for the same period since 2020. If old hen culling continues at high levels, it will offset the negative impact of increased newly-laying hens; otherwise, supply-side support for egg prices will weaken.
On the demand side, with the Mid-Autumn and National Day holidays approaching, peak-season demand is winding down, trade-side stockpiling is becoming more cautious, and a post-holiday pullback is expected, with demand support for egg prices gradually weakening. In summary, egg prices are highly likely to see a seasonal decline after the holidays, and subsequent price trends will depend on supply-side influences.
Corn: Corn enters harvest period, when will cost support materialize? (Wang Na, Practitioner License No.: F0243534; Trading Advisory License No.: Z0001262). Overseas market: In Q3, U.S. wheat and corn rose initially before falling, with corn outperforming wheat, and overseas grain futures generally at high levels.
Q3 market influencing factors: 1. Escalation of Black Sea geopolitical conflicts strengthened concerns about Russian and Ukrainian supply disruptions. 2. Persistent heatwaves and drought in Europe led to yield declines, with grain production expectations lowered in major wheat and corn producing countries. 3. Global grain inventories fell to low levels, with the U.S. corn stock-to-use ratio near a ten-year low. 4. In August, speculative funds accelerated entry, El Ni帽o weather speculation heated up, and domestic and international futures prices moved higher in tandem.
In Q3, U.S. wheat rebounded significantly from low levels, briefly pulling back in July under harvest pressure before rising rapidly again. In September, the U.S. wheat index surged to 795 cents per bushel, a three-year high, with wheat and corn rising in tandem. In the U.S. corn market, the Pro Farmer crop tour lowered corn yield estimates, and restricted Ukrainian corn exports further tightened global supply. At the end of August, the CBOT corn front-month contract approached 550 cents, a near two-year high, before being dragged down by profit-taking, weak U.S. sales, and falling oil prices, with prices retreating to around 529 cents on September 23, though still at multi-year highs.
Domestic market: In Q3, domestic corn spot prices rose initially before falling, with the price range continuously shifting lower under futures drag. Specifically, corn prices oscillated weakly in July, staged a phased rebound in both futures and spot in August under weather and wheat market support sentiment, and fell in tandem in September as new grain listing expectations materialized, overall showing a pattern of "stable early, pulsed in the middle, declining late," with the price center moving downward. In Q4, the core contradiction in the domestic corn market fundamentals is the new-season bumper harvest expectation plus weak feed demand plus substitute pressure. Short-term focus should be on North China harvest-period weather and the impact of North China corn quality on phased supply.
Longer term, during the new-old crop transition period, corn futures and spot prices will slowly decline. During the transition, old crop stocks remain, feed mills purchase on a need-to-use basis, port inventories are elevated, and procurement remains conservative. Going forward, how new grain listing pressure materializes will require attention to downstream procurement sentiment's impact on the market. Technically, the 2,150 yuan per tonne level for the November corn contract has become major cost support. After the National Day holiday, continued attention should be paid to the effectiveness of technical support, waiting for buying opportunities after the price adjustment ends.
Hogs: Strong expectations versus weak reality, limited support from dual-holiday consumption (Wang Na, Practitioner License No.: F0243534; Trading Advisory License No.: Z0001262). 1. In Q3, hog spot prices maintained an oscillating performance. In the first half of July, boosted by increased phased secondary fattening demand, hog prices rebounded modestly. However, as temperatures gradually rose across regions, demand remained weak, and prices pulled back in the second half of the month. As spot prices retreated, secondary fattening willingness revived, again providing support for hog prices, and in early August, hog spot prices rebounded once more. At the end of August, prices weakened again. Based on current performance, pre-Mid-Autumn and National Day demand support for spot prices has been relatively limited, with ample supply continuing to weigh on hog prices. In September, hog spot prices continued to weaken.
As of September 23, the national average hog price stood at 10.44 yuan per kg, down 0.32 yuan per kg from the end of Q2. The Q3 high occurred on August 19 at 11.34 yuan per kg. In Henan, the benchmark delivery location, hog prices were 10.83 yuan per kg, down 0.15 yuan per kg from the previous week.
2. Data showed that on September 11, the selling price of reserve breeding sows was 1,404 yuan per head, down 16 yuan per head from the end of Q2. In Q3, sow selling prices generally continued their prior modest downward trend.
3. In Q3, piglet prices rose initially before falling. As of September 23, the average piglet price was 132 yuan per head, down 14 yuan per head from the end of Q2 and down 137 yuan per head from the Q3 high. In Q3, market piglet supply was relatively ample, and piglet prices were influenced by restocking willingness, rising initially before falling. Piglets restocked in July correspond to hog marketings during the full peak season before the Spring Festival, so as piglet prices fell to a low at the end of June, restocking sentiment increased, boosting piglet prices. As piglet prices rose to the Q3 high at the end of July, farming-side restocking willingness declined, and piglet prices fell.
4. Data showed that in Q2 2026, national hog inventories stood at 424.91 million head, up 450,000 head or 0.1% year-on-year. Of this, breeding sow inventories stood at 37.8 million head, down 2.63 million head or 6.5% year-on-year, with the decline widening by 3.2 percentage points from Q1. This represents 100.8% of the normal retention level.
5. In Q3, hog slaughter weights first declined then increased. As of September 24, the slaughter weight tracked by Zhuochuang sample points was 124.9 kg per head, up 1.03 kg per head from the end of Q2. In July, high temperatures across regions caused slow hog weight gain, and farming operations generally held animals waiting for higher prices. In the second half of the month, affected by lagging monthly marketing progress, the pace of marketings continuously accelerated, and July average slaughter weights gradually declined. After the Start of Autumn solar term, farming-side willingness to hold for higher prices strengthened, and slaughter weights subsequently increased.
6. Customs data showed that in August 2026, pork imports stood at 60,000 tonnes, flat month-on-month.
7. Wind data showed that on September 16, the government website published a hog-to-grain ratio of 4.57.
8. Zhuochuang data showed that on September 24, self-breeding and self-raising farming profit was -207 yuan per head, with losses narrowing by 39 yuan per head from the end of Q2, and piglet fattening profit was -123 yuan per head, with losses narrowing by 20 yuan per head from the end of Q2. Farming costs remained relatively stable, and hog farming profits were mainly affected by spot prices, with losses first narrowing then expanding again. However, in absolute terms, hog farming remained in a loss phase throughout Q3.
9. In Q3, slaughterhouse operating rates generally showed an increasing trend. As of September 24, the operating rate of sample slaughterhouses was 41.82%, up 6.62 percentage points from the end of Q2. In July, under high-temperature conditions, pork end-user consumption remained weak, and slaughterhouse operating rates continued the low-level oscillation seen in June. After the Start of Autumn solar term, high temperatures gradually subsided across regions, and end-user consumption recovered somewhat. Subsequently, boosted by back-to-school season and Mid-Autumn and National Day holiday demand, slaughterhouse operating rates continued to increase.
10. Overall, Q4 hog market influencing factors remain concentrated on supply-side impacts. At the end of September, with the Mid-Autumn and National Day long holidays approaching, downstream market procurement and stockpiling did not provide support for hog prices, and the "strong expectations, weak reality" situation in the hog market will persist.
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