Everbright Futures: Weather speculation heats up, soybean meal follows US soybeans to strengthen.

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Overnight, US soybeans surged 3.8%, raising import costs and driving up soybean meal prices. On Tuesday, the main soybean meal contract posted an intraday gain of over 1%. Ahead of the U.S. holiday, concerns over crop weather in the Midwest and improving demand triggered buying, pushing soybean meal to follow the external market's strong performance in the short term.
In terms of weather, the main producing regions in the U.S. Midwest will face high temperatures and low rainfall, coinciding with the critical growth period for US soybeans. The weather has ignited expectations of reduced yields. The soybean crop condition rating has declined for two consecutive weeks. After-market crop reports showed US soybean condition at 64%, below market expectations of 66%. The July–August pod-setting and filling period is the core window for pricing US soybeans for the entire year. Actual rainfall and temperature changes in the producing regions over the next two weeks will directly determine the sustainability of this rebound. Additionally, US soybean export inspection data was 528k tons, near the upper end of the estimate range, with the market expecting continued improvement in US soybean export demand. Domestically, spot soybean meal prices rose in line with the futures market, and near-month basis remained stable. End-users built inventory on dips, and soybean meal trading volume was decent. Rising import costs continue to push futures prices higher, with the market following external trends. Closely monitor weather in US soybean producing areas and the pace of domestic soybean meal inventory accumulation. (Everbright Futures)
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