Oilseeds and edible oils saw a broad rally this week, driven by firm crude oil prices, supply concerns, resilient demand, and heightened risk appetite among investors. Strong July soybean crush data from the US and a steady stream of large export sales underscored robust demand for US soybeans. Field survey results from Pro Farmer showed higher pod counts in Illinois and Iowa versus the three-year average, but lower counts in Kansas, Nebraska, South Dakota, and North Dakota. The group projected a US soybean yield of 53.3 bushels per acre, up 0.6 bushels from the August supply/demand report, potentially reaching a record high. Weather forecasts indicate reduced rainfall across US soybean regions over the next two weeks with near-normal temperatures, warranting close monitoring.

Canadian authorities raised their export and domestic crush forecasts for 25/26 canola, cutting ending stocks by nearly 1 million tonnes, while also increasing 26/27 production estimates by 600,000 tonnes, ultimately lowering 26/27 ending stocks by 500,000 tonnes to 1.5 million tonnes. Both US soybeans and Canadian canola face high supply but equally resilient demand, keeping inventory pressure moderate. Domestic protein meal futures tracked overseas gains, with spot prices following suit. August-September soybean arrivals remain high, and crushers are actively purchasing forward cargoes, ensuring ample supply. Feed demand from hog and poultry sectors persists, though weak养殖 profitability has processors buying on a hand-to-mouth basis, with some reducing meal inclusion rates. The pattern of weaker domestic versus overseas prices and softer cash versus futures markets is increasing resistance to further protein meal gains.

In the oils complex, market conviction is growing that this year's El Ni帽o could be a historically strong event, with futures pricing in palm oil production risks ahead of time. High-frequency data shows Malaysian exports fell 5.5% in August 1-20, with production also declining, suggesting limited inventory pressure. Stalled US-Iran negotiations and ongoing constraints on Strait of Hormuz transit have added geopolitical risk premiums, while tighter supply boosted crude prices, providing dual support to international oilseeds and oils through industrial demand and input costs. Overseas oil markets accelerated gains, pulling domestic oils higher. The sustainability of the overseas rally remains a key focus.

Egg futures saw a pullback early in the week, a rebound on Thursday, and another decline on Friday, maintaining a range-bound pattern. The main 2610 contract closed the week down 3.11% at 3,834 yuan/500 kg. Spot egg prices rose then corrected but remained higher week-on-week, with the national average brown egg price at 5.13 yuan/jin by August 21, up 0.27 yuan/jin, peaking at 5.17 yuan/jin on August 18. Mid-Autumn Festival preparation by food companies boosted procurement in the first half, while trader expectations of higher prices lifted buying enthusiasm, driving steady gains. After prices reached temporary highs, downstream demand lagged, leading to modest pullbacks in some regions late in the week.

With the peak demand season underway, holiday stocking supports spot prices, though sustained increases are curbing consumption. Upcoming school reopenings should maintain support. On the supply side, farmers' willingness to cull older hens is strengthening, with culling volumes at 22.29 million birds on August 20, up for six consecutive weeks and at the highest seasonal level since 2021. Sustained or higher culling could offset the increase in new laying hens from April-May chick placements entering production in August-September. Given current spot strength, futures may remain range-bound absent fresh bullish catalysts. Attention should focus on demand shifts affecting spot prices and market sentiment in futures.

On the international front, CBOT grains were broadly firm, with corn hitting an 18-month high and soybeans rising, while wheat gained on Black Sea supply risks. Pro Farmer field tours revealed some US Midwest corn and soybean crops underperforming expectations, fueling yield concerns. USDA crop condition ratings for corn slipped, with excessive rain raising flood risks in some areas. Disruptions to Black Sea grain exports added a risk premium to wheat, while a weaker dollar supported US grain exports. Markets await export data and weather developments, with caution advised on profit-taking if conditions improve.

Domestic corn prices edged lower, with the national weekly average at 2,298 yuan/tonne as of August 20, down 5 yuan/tonne or 0.22%. Northeast prices stabilized and rose slightly, supported by futures gains midweek, while North China prices halted declines with limited rebounds. Southern port prices firmed modestly amid divergent sentiment and cautious观望. Feed demand remains weak, with processors cautious in purchasing, though futures gains have instilled some confidence. The bullish August USDA report has corn leading gains, with wheat following. Given ample substitute supplies domestically, attention shifts to El Ni帽o's impact on the agricultural complex and potential fund rotation, with risks of price pullbacks after rallies.

Live hog prices extended gains before a slight correction. The national average price reached 11.24 yuan/kg by August 20, up 0.38 yuan/kg week-on-week, with Henan benchmark prices at 11.18 yuan/kg, up 0.15 yuan/kg. Early in the week, a wide fat-lean spread encouraged farmers to hold back hogs, supporting prices. Later, as terminal prices lagged, slaughterhouses reduced throughput to manage inventories, and some farms increased sales, prompting modest declines.

Piglet prices continued falling, averaging 160 yuan/head on August 20, down 26 yuan/head. Supply is stable, but demand weakened as piglets purchased now would be marketed after the Spring Festival holiday, when feedlot confidence is low, reducing补栏 interest. Slaughter weights edged up slightly, with northern terminal demand absorbing some large hogs at higher prices, while southern farms saw slower weight gains due to heat. The government-reported hog-to-grain ratio stood at 4.43 on August 12.

Farrow-to-finish losses narrowed to -105 yuan/head on August 20, improving 46 yuan/head week-on-week, while nursery-to-finish losses narrowed to -143 yuan/head, improving 53 yuan/head. Lower feed and piglet costs, combined with higher hog prices, reduced overall losses. Slaughter utilization rose to 35.24% as of August 20, up 0.28 percentage points, as cooler weather and pre-school stocking boosted demand.

Looking ahead, March-born piglet numbers fell year-on-year, with April-June piglets declining sequentially, supporting supply improvements in Q3. Combined with Mid-Autumn, National Day, and year-end seasonal demand, a modest price rebound is anticipated.