[Audio Version] Jinshi Futures Breakfast on November 26, 2024 (Tuesday)

Futures morning peak - audio version

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Macroeconomic news

1. According to the People's Bank of China, on November 25, 2024, the People's Bank conducted 900 billion yuan of Medium-term Lending Facility (MLF) operations with a term of 1 year, a maximum bidding rate of 2.30%, a minimum bidding rate of 1.90%, and a winning rate of 2.00%.

2. Since the beginning of the 14th Five-Year Plan, the province has cumulatively invested approximately 72.49 billion yuan in water transportation infrastructure construction. Currently, Guangdong has basically established a relatively complete specialized port system for coal, oil and gas, ores, grains, containers, etc., forming a relatively complete shipping ecological chain. In the first 10 months of this year, the container throughput of Guangdong ports reached a cumulative total of 64.26 million TEUs, a year-on-year increase of 9.7%. It is expected that the annual container throughput of ports will reach 75 million TEUs, setting a new historical record.

3. According to a survey conducted by the China Logistics and Purchasing Federation on the market prices of 50 major bulk commodities nationwide, the prices during this period (November 18 to November 22, 2024) compared to the previous period showed that 33 commodities (66%) had price declines, 15 commodities (30%) had price increases, and 2 commodities (4%) remained stable.

4. According to data from the Shanghai Shipping Exchange, as of November 25, 2024, the Shanghai export container settlement price index (European route) was reported at 2861.60 points, an increase of 3.2% compared to the previous period.

5. According to a report by AXIOS, a senior U.S. official stated on Monday that Israel and Lebanon have agreed to the terms of a ceasefire agreement to end the conflict between Israel and Hezbollah. Both sides have not yet officially announced that an agreement has been reached. The U.S. official said that Israel's security cabinet is expected to approve the agreement on Tuesday. An Israeli official confirmed that the cabinet will meet on Tuesday.

Global futures market volatility

1. International precious metal futures fell sharply, with COMEX gold futures down 3.16% to $2,626.4 per ounce, and COMEX silver futures down 3.15% to $30.35 per ounce.

2. International oil prices fell across the board, with U.S. oil January 2025 contract down 3.03% to $69.08 per barrel. Brent oil February 2025 contract down 2.75% to $72.58 per barrel.

3. London base metals collectively rose, with LME copper up 0.85% to $9,044 per ton, LME zinc up 1.8% to $3,020 per ton, LME nickel up 1.25% to $16,170 per ton, LME aluminum up 0.9% to $2,647.5 per ton, LME tin up 0.02% to $28,920 per ton, and LME lead up 0.02% to $2,022.5 per ton.

4. The main contracts for agricultural futures on the Chicago Board of Trade (CBOT) closed mixed, with soybean futures up 0.28% at 986.25 cents/bushel; corn futures down 0.46% at 433.25 cents/bushel; and wheat futures down 1.46% at 556.5 cents/bushel.

5. Domestic commodity futures closed mixed in the night session, with most energy and chemical products down, crude oil down 2%, glass down 1.44%, styrene down 1.07%, and No. 20 rubber up 1.68%. Most black-series products rose. Agricultural products were mixed, with palm oil rising nearly 1%. Most base metals closed higher, with Shanghai nickel up 1.29%, Shanghai zinc up 1.07%, Shanghai aluminum up 0.66%, Shanghai copper up 0.2%, Shanghai tin down 0.1%, and stainless steel down 0.19%. Shanghai gold fell 2.8%, and Shanghai silver fell 2.29%.

Hot news on black series

1. Luo Tiejun, vice president of the China Iron and Steel Industry Association, stated that China's position as the world's largest steel producer and consumer will exist for a long time, and there will still be high demand for iron ore and coking coal to continue supporting the global dry bulk shipping market. It is expected that with the production of a number of new iron ore projects, the output pattern of iron ore will undergo new changes, and the supply of iron ore will become more diversified, posing new requirements for channel construction.

2. According to the China Iron and Steel Association, in mid-November, the social inventory of five major steel varieties in 21 cities was 6.84 million tons, a decrease of 90,000 tons, down 1.3%, with inventory continuing to decline slightly; down 450,000 tons compared to the beginning of the year, down 6.2%; and down 890,000 tons compared to the same period last year, down 11.5%. Among them, rebar inventory was 2.67 million tons, an increase of 150,000 tons, up 6.0%, with inventory continuing to increase; down 380,000 tons compared to the beginning of the year, down 12.5%; and down 280,000 tons compared to the same period last year, down 9.5%.

3. According to Mysteel, from November 18 to November 24, 2024, the total shipment of Australian and Brazilian iron ore was 25.476 million tons, a decrease of 112,000 tons compared to the previous period. Shipments from Australia totaled 17.48 million tons, an increase of 254,000 tons, of which 14.695 million tons were shipped to China, an increase of 338,000 tons. Shipments from Brazil totaled 7.996 million tons, a decrease of 366,000 tons.

4. According to SMM, the 1280m³ blast furnace of Zhongyang Iron and Steel began maintenance on November 23, with an expected maintenance duration of 30 days, affecting pig iron production by 3,200 tons/day; Xinjiang Kunlun Steel plans to shut down one 630m³ blast furnace for maintenance on December 10, with the resumption time to be determined, affecting pig iron production by 2,000 tons/day; Xinjiang Bayi Iron and Steel plans to shut down the second 2500m³ blast furnace for maintenance on December 8, with the resumption time expected after the Spring Festival, affecting pig iron production by 6,000 tons/day.

5. According to Mysteel, from November 18 to November 24, 2024, the total quantity of iron ore arriving at 47 ports in China was 24.755 million tons, a decrease of 4.304 million tons compared to the previous period; the total quantity of iron ore arriving at 45 ports in China was 22.972 million tons, a decrease of 4.847 million tons; and the total quantity of iron ore arriving at six northern ports was 10.279 million tons, a decrease of 4.69 million tons.

Hot news on agricultural products

1. According to the National Grain and Oil Information Center, in the first three weeks of November, the domestic major oil mills crushed 6.1 million tons of soybeans. Currently, the overall inventory of soybeans at oil mills is sufficient, with only a few mills stopping production due to a lack of soybeans. With good crushing profits, it is expected that the total soybean crushing volume in oil mills in November will be around 8.3 million tons, compared to 8 million tons in the same period last year, and the average for the past three years is 8.02 million tons.

2. According to Mysteel, as of November 22, 2024, the commercial inventory of soybean oil in key regions across the country was 1,065,900 tons, a decrease of 12,200 tons compared to last week, down 1.13%; the commercial inventory of palm oil in key regions was 507,900 tons, a decrease of 23,200 tons compared to last week.

3. According to Malaysia's independent inspection agency AmSpec, Malaysia's palm oil export volume from November 1-25 was 1,156,791 tons, down 8.19% from 1,260,033 tons exported in the same period last month.

4. According to Mutiant Technology, from November 21 to 25, Guangxi added 11 new sugar mills in production. As of now, preliminary statistics show that the total number of sugar mills in Guangxi for the 2024/2025 crushing season has reached 45, an increase of 35 compared to last year; daily crushing capacity is 378,000 tons, an increase of 302,500 tons compared to last year.

5. The Ministry of Commerce and the Zhejiang Provincial People's Government issued the (Plan for the Construction of a Bulk Commodity Resource Allocation Hub in the China (Zhejiang) Pilot Free Trade Zone). The plan points out the construction of a multi-level futures and spot market. Support Zhoushan in establishing a bonded soybean trading warehouse, conducting pilot physical delivery of imported soybeans, and supporting relevant business entities to sell or transfer bonded soybeans in the bonded trading warehouse through the soybean trading center.

6. According to shipping survey agency ITS, Malaysia's palm oil export volume from November 1-25 was 1,200,421 tons, down 9.22% from 1,322,325 tons exported in the same period last month.

7. According to Wind data, as of November 25, 2024, the national port inventory of imported soybeans was 7.78052 million tons, up from 7.66197 million tons on November 18, an increase of 118,550 tons.

8. Agricultural consultancy AgRural stated on Monday that as of last Thursday, the soybean planting rate for the 2024/25 season in Brazil has reached 86%, higher than the previous week's 80% and last year's 74%.

9. The Solvent Extractors' Association (SEA) of India recently sent a memorandum to the central government requesting a reconsideration of the 2021 decision and instructing SEBI to restore futures trading for all commodities, or at least restore futures trading for international trading commodities such as crude palm oil and crude soybean oil.

10. U.S. Department of Agriculture data showed that as of the week ending November 21, 2024, the U.S. soybean export inspection volume was 2,102,002 tons, in line with market expectations; the previous week, revised to 2,266,415 tons, with an initial value of 2,165,075 tons. The U.S. shipped 1,230,717 tons of soybeans to China (mainland). In the previous week, the U.S. shipped 1,390,057 tons of soybeans to mainland China. The soybean export inspection volume from the U.S. to China accounted for 58.55% of the total export inspection volume for that week, down from 64.20% last week.

11. The U.S. Department of Agriculture (USDA) reported in its crop growth report that as of the week ending November 24, 2024, the good-to-excellent rate of U.S. winter wheat was 55%, higher than the market expectation of 51%, up from 49% the previous week and 50% the same time last year. The planting rate of U.S. winter wheat was 97%, consistent with the market expectation of 97%, up from 94% the previous week and matching last year's 97%, with a five-year average of 98%. The emergence rate of U.S. winter wheat was 89%, up from 84% the previous week and down from 90% last year, with a five-year average of 89%.

12. According to Brazil's National Supply Company (CONAB) under the Ministry of Agriculture, as of November 24, Brazil's soybean planting rate was 83.3%, up from 73.84% last week and 75.0% in the same period last year; Brazil's corn planting rate was 58.7%, up from 52.43% last week and 55.0% in the same period last year.

Hot news on energy and chemicals

1. Kazakhstan's Energy Minister Almasadam Satkaliyev stated on Monday that Kazakhstan will produce 88.4 million tons of oil this year, lower than the original plan of over 90 million tons, reflecting maintenance disruptions at large oil fields and Kazakhstan's commitments to OPEC+. Kazakhstan will export 68.8 million tons of oil this year.

2. According to Longzhong Information, as of November 24, 2024, the total inventory of bonded and general trade rubber in Qingdao was 423,500 tons, basically unchanged from the previous period. The inventory in the bonded area was 55,300 tons, a decrease of 1.08%; the general trade inventory was 368,200 tons, an increase of 0.17%.

3. According to Longzhong Information, as of November 25, Jiangsu's port sample inventory of styrene was 31,500 tons, a decrease of 11,000 tons from the previous period, a decline of 25.88%. The commodity volume inventory was 20,500 tons, a decrease of 7,800 tons from the previous period, a decline of 27.56%.

4. According to two informed sources, Donald Trump's transition team is working on a broad energy plan that will be launched within days of his taking office, which will approve export licenses for new liquefied natural gas projects and increase oil drilling on U.S. coastal and federal lands.

5. Independent energy analyst Tim Evans stated that the OPEC+ meeting in December is expected to further delay the timeline for increasing supply until February next year, which will provide more support.

6. The Azerbaijani Energy Minister stated that OPEC+ may consider deciding to maintain the current oil production reduction policy starting January 1 at the next meeting, as the organization has postponed its production recovery plan due to demand concerns.

Hot news on metals

1. According to Mysteel, as of November 25, domestic market electrolytic copper spot inventory was 135,800 tons, a decrease of 23,500 tons compared to November 18, and a decrease of 20,500 tons compared to November 21; domestic electrolytic copper social inventory continues to trend downward, with a significant reduction, and each market has shown varying degrees of decline.

2. Rusal, one of the largest aluminum producers in the world, announced on its official website the launch of a production optimization plan, with the first phase involving a reduction of 250,000 tons of output.

3. Ole Hansen of Saxo Bank stated in a report that Trump's choice of hedge fund billionaire Basant as his Treasury Secretary suppressed safe-haven behavior, leading to declines in gold, the dollar, and U.S. Treasury yields while the stock market rose. Hansen noted that Basant is known for his hawkish fiscal stance, believing tariffs should be used more as negotiation tools and implemented gradually.

4. Federal Reserve official Kashkari stated that a rate cut in December is a reasonable consideration. The neutral rate may be higher, and policy constraints will not be so strict. Geopolitical risks are the primary consideration for the economic outlook. No comments on the Treasury nominee. The government needs to put the U.S. on a sustainable fiscal path.

Praise 'Futures' Talk - Uncovering the Trading Logic of Varieties!

1. Yesterday, the main contract for European shipping fell to the limit at the end of the session. What happened to the fundamentals?

Shenwan Hongyuan Futures Analysis pointed out that on Monday, the EC operated weakly, with the main 02 contract hitting the limit down at the end of the session, closing at 2722.1 points, essentially reversing the gains since November, mainly due to the impact of weak reality fermenting. The Israeli ambassador to the U.S. stated that Israel and Hezbollah are close to reaching a ceasefire agreement, and the SCFIS European line published after the market closed was 2861.2 points, up 3.2% compared to the previous period, corresponding to the departure settlement price for week 47, about $4,400 for a large container. Currently, after the shipping company raised December freight rates, only CMA CGM slightly reduced the large container quote to $5,960, but it remains around $6,000, and the weakening expectations for December freight rates have limited impact. Monday's market saw a sharp decline, with doubts about the rebound in European line demand at the end of the year. If demand does not show an effective rebound by the end of the year, combined with the potential oversupply situation in 2025, the recently rebounding trend since the fourth quarter of this year may be approaching a turning point.

2. The upward space for oil prices is limited; how should we view the future market?

Galaxy Futures analysis pointed out that in terms of supply and demand, the temporary supply disruption in the Beihai oilfield has limited impact, and the cold wave in the U.S. has led to oilfield shut-ins, limiting the upward space for supply at the end of the year. At the same time, the market expects OPEC+ to further extend the production cuts in the meeting in early December. In the off-season for consumption, supply-side growth is limited, and inventory pressure has eased somewhat. In terms of valuation, downstream refined oil crack spreads are stable, and overseas refinery profits are stable month-on-month. In the medium to long term, the market has a consensus expectation that the global oil supply-demand will shift to an oversupply pattern in 2025, coupled with weak demand growth and high idle capacity, limiting the upward space for oil prices, with downward pressure on prices. The major driving force for significant increases comes from unexpected deterioration of geopolitical conflicts. Short-term oil prices are expected to fluctuate widely, and geopolitical disturbances still need attention.

Recent important futures data and events overview

1. On November 27 at 3:00, the Federal Reserve will release the minutes of the November monetary policy meeting. Although a second rate cut was made earlier this month as expected, Fed Chairman Powell's dovish stance has weakened. Powell previously stated that the U.S. economy has been performing strongly recently, and the Fed does not need to rush to cut rates. Attention is on the views of the U.S. economy in this month's meeting minutes.

2. On November 27 at 21:30, the revised annualized quarterly rate of real GDP for the third quarter in the U.S. will be released. The preliminary data previously released showed that the annualized quarterly rate of real GDP in the U.S. grew by 2.8% in the third quarter, compared to a growth of 3% in the previous quarter. Recently, the performance of the U.S. economy has been strong, and attention is on whether the U.S. Department of Commerce will raise the annualized quarterly GDP rate.

3. On November 27 at 23:30, the U.S. October core PCE price index year-on-year will be released. The U.S. September core PCE price index year-on-year recorded 2.7%, unchanged from the previous month, and the month-on-month rate for September was 0.3%, rebounding from last month's (0.2%). The U.S. core PCE price index year-on-year continues to approach the Fed's target of 2%, supporting the Fed's pace of rate cuts after the first significant cut. Attention is on the results of this data release; if the year-on-year PCE price index shows further decline, it may lead to a delay in the Fed's rate cut pace.

Article forwarded from: Jinshi Data