Panic subsided and soybean meal resumed its rising trend.

Dalian soybean meal futures fell sharply on Wednesday and Thursday, affected by the Greek sovereign debt crisis and a sharp fall in the Chinese stock market. But as the risk of Brexit diminished and the Chinese stock market stabilized and rebounded, panic in commodity markets eased temporarily and Dalian soybean meal futures resumed their rally. Looking forward to the future, the fundamentals of American beans are still on the high side, domestic soybean meal demand is booming, and soybean meal futures still have room to rise.

Systemic risk passes temporarily, and the market returns to rationality

The risk of Greece leaving the EU increased as a result of its refusal to accept the EU's harsh fiscal austerity measures, so the dollar index rose and the prices of commodities such as crude oil and copper plummeted. But for now, Greece's softening attitude, increased willingness to stay in the euro zone, coupled with the support of France, Italy and other countries, Greece is more likely to stay in the euro zone. In addition, China's stock market stabilized and rebounded on Thursday under the influence of continuous positive measures by the government. The market panic dissipated and mistakenly killed commodities rebounded quickly. And the fundamentals are too much, the original upward trend of soybean meal futures is even more outstanding, in Friday night trading hit a new high.

Although it is not known whether the rebound in China's stock market will continue, investors who have been baptized by panic falls will be more rational, commodities will be less likely to plummet collectively, and the market will pay more attention to the supply and demand fundamentals of commodities.

This month the USDA reported that Lido soybean meal

On Saturday, the USDA released this month's report on supply and demand for agricultural products. The report lowered US soybean stocks at the end of last year to 255 million bushels, below last month's estimate of 330 million bushels and the average market estimate of 287 million bushels. Although the report increased U.S. soybean acreage and production in 2015-2016, stocks at the end of 2015-2016 still fell significantly to 425 million bushels, 50 million bushels lower than last month's estimate, as a result of lower opening stocks and higher consumption and export figures.

At present, American soybean is still in a critical growth period. under the premise of declining excellent and good soybean growth rate, and the sowing and growth progress are lagging behind last year, the per unit yield of American soybean is facing great uncertainty. there is a possibility of further tightening in the supply of American beans.

Demand for soybean meal is expected to pick up.

As the stock of live pigs is falling and the supply of pork is declining, pig prices have been rising since March this year and have risen for 17 consecutive weeks. According to statistics, the average price of live pigs in Henan Province on July 8 was 16.91 yuan / kg, up 50.3 percent from the lowest price on March 11 and 25.6 percent from the same period last year. With the rebound of pig prices, farmers' farming benefits have been turned from deficit to profit. The price ratio of pig food has been above the break-even point of 6 ∶ 1 for 8 consecutive weeks. On July 8th, the ratio of pig to grain in Henan Province reached 7.32 ∶ 1.According to this price, the profit of each fattening pig produced by large-scale breeding enterprises is about 300yuan, and that of fattening pigs in small and medium-sized farms is about 400yuan. The increase of pig profits will stimulate the increase of pig stock, and the continuous decline of pig feed production will usher in a phased inflection point.

Technically, last Wednesday and Thursday's decline led to a correction in the excessive wobble index of soybean meal futures and the overbought index was repaired. Operationally, you can continue to do long bargains.