ShouChuang Futures: Two Meal Futures Pull Back, Nearby Contracts Continue to Lead the Decline

Driven by the overnight crash in crude oil prices, today the domestic palm oil, fats, and oilseeds market is overall weaker. Both rapeseed meal and soybean meal futures, as well as soybeans No. 2, continue yesterday’s pullback trend; the near-month May contract leader keeps cutting positions and is lagging the most. In the spot market, prices have started to loosen: during the day, soybean meal spot prices fell by 10–40 yuan/ton, while rapeseed meal fell by 20–30 yuan/ton. As downstream replenishment comes to an end, upstream price-support sentiment has weakened. Weekly inventory data shows that soybean inventories at oil mills are still significantly higher than the same period in prior years. On the overnight cost side, conditions have changed little: U.S. soybeans rebounded slightly, Brazil’s basis premiums/discounts are broadly steady, and today’s exchange-traded board profits have again weakened. Overall, the main factors behind the decline in both rapeseed meal and soybean meal are the disruption to market participants’ sentiment caused by the crude oil crash, as well as the trend toward looser spot supply. However, support on the cost side still exists, which limits the decline in prices for longer-dated contracts. (CICC Futures)