Shouchuang Futures: U.S. soybean prices plummet, suppressing cost weakness; domestic meal futures rebound after hitting bottom

Overnight U.S. soybeans hit the limit down because the expected purchase of 8 million tons of old U.S. soybeans did not occur after the China-U.S. Paris trade talks, and Trump’s visit to China may be delayed. Concerns over the uncertainty of U.S. soybean exports triggered a sharp decline in the market, with soybean oil and canola meal also falling more than 5%. However, the two domestic meal contracts rebounded after testing their lows, with limited declines. The main May soybean meal contract, after reaching a cost support of 3000 yuan/ton, continued to narrow its losses, ultimately closing slightly higher for the day, which also led to a rebound in canola meal in the late trading session. Overall, today’s strong domestic and weak external performance significantly adjusted the market’s profit margins, with the deferred contracts showing direct hedging opportunities. Spot market sentiment remains relatively optimistic in the short term, limiting the decline in domestic protein prices, but if U.S. soybeans do not rebound significantly in the evening, the cost-driven trend may turn bearish. It is also important to note that the end-of-month report on U.S. soybean planting area still carries potential for further bearish signals. Meanwhile, downstream livestock profits remain weak, imposing long-term restrictions on feed raw material prices. In terms of trading strategy, it is not recommended to buy on dips in the short term; a wait-and-see approach is advised. (Shouchuang Futures)