Caixin Futures Weekly Review on Agricultural Products: Crude Oil Strength Boosts Oils, Soybean Meal and Corn Remain Strong, Live Hog and Egg Remain Weak

(1) Palm Oil: Overnight crude oil surge boosted US soybean oil, and domestic oils are running relatively strong with optimistic expectations for biodiesel demand. On Friday, the main palm oil contract rose by 2.44%, breaking through 9,200 yuan/ton to reach a new monthly high; rapeseed oil increased by 1.89%, supported by ICE canola; soybean oil followed with a 0.79% rise. The increase in crude oil narrowed the POGO spread to negative, making Indonesia's B40 blending profits considerable, which may boost biodiesel consumption; rumors of Indonesia reconsidering B50 blending have disturbed the market, with current trends mainly driven by the energy sector and sentiment. In the spot market, Guangdong 24-degree palm oil rose by 200 yuan to 9,140 yuan, soybean oil increased by 80 yuan to 8,780 yuan, and rapeseed oil rose by 180 yuan to 10,170 yuan. The US biofuel blending rules are expected to be announced by the end of March, so special attention should be paid to the transmission of POGO spread to biodiesel profits. Overall, the market remains in a relatively strong oscillation. (2) Soybean Meal: The surge in crude oil has driven vegetable oils higher, which in turn has increased the cost of imported soybeans, making this the main logic behind the strength in soybean meal. In addition, the hedging demand for agricultural products is also an important factor for the recent strength in agricultural products. Domestically, soybean meal inventories remain high, and supply pressure still exists, but the rate of pressure decline is relatively fast. On a month-on-month basis, this supports a relatively strong performance for soybean meal. It is recommended to mainly go long on dips. (3) Corn: The main logic for the strong performance of corn prices is that northern port inventories are still relatively low year-on-year, but downstream enterprise losses and warmer weather are not conducive to corn storage, which may weaken the momentum for further short-term increases. It is recommended to pay attention to post-holiday farmer grain sales progress and national reserve auction information, and mainly go long on dips. (4) Live Hog: Although the number of breeding sows has decreased month-on-month, the absolute value is still higher than the normal retention level, coupled with excellent production performance, so in the medium term, supply is still relatively large. In the short term, the second round of fattening before the holiday has not been fully digested and the recent slaughter volume is gradually recovering, so supply remains strong. Combined with extremely weak post-holiday demand, spot prices continue to weaken. It is recommended to mainly go short on rallies and pay attention to changes in slaughter volume. (5) Eggs: Post-holiday purchasing and sales are recovering slowly, logistics have not fully recovered, and current sales are mainly within production areas. From a supply and demand perspective, supply will remain large in February and March, and terminal demand is in the off-season. It is recommended to mainly go short on rallies and pay attention to the pace of subsequent restocking by traders.