Overview of China's Grain, Oil, and Feed Market in February 2026: Policy Support for Capacity Expansion Amid Intensified Post-Holiday Supply-Demand Games
February 28, 2026, 4:45 PM
GAPS-Global
323
Guide
Highlights at a glance
The 2026 No. 1 Central Document prioritizes stabilizing grain and oil production, emphasizing diversified oilseed supply to reduce import dependency. Internationally, Brazilian soybean harvests pressure prices, while domestic soybean meal inventories rise post-Spring Festival. Corn supply remains tight due to logistical delays, but a price correction is expected. The breeding sector faces sustained losses, limiting feed demand. Looking ahead, market balance will depend on policy implementation, import trends, and seasonal demand recovery. Participants must navigate structural shifts while monitoring policy and macro risks.
I. Policy Direction: No. 1 Central Document Sets the Tone, Diversified Oilseed Supply Becomes Core
On February 3, 2026, the "Opinions of the CPC Central Committee and the State Council on Anchoring Agricultural and Rural Modernization and Solidly Promoting Comprehensive Rural Revitalization" (the 2026 No. 1 Central Document) was officially released. The document explicitly places "stabilizing and developing grain and oil production" as the top priority, proposing to intensify the implementation of a new round of actions to increase grain production capacity by 100 billion jin.
For the oils and oilseeds sector, the policy focus is on "consolidating and enhancing soybean production capacity" and "expanding diversified supply of oilseeds." The document emphasizes improving the connection between soybean production and sales, and expanding production space for rapeseed, peanuts, camellia oleifera, and other crops. This policy orientation provides long-term confidence support for domestic oilseed planting, aiming to reduce excessive reliance on imported soybeans and build a safer grain and oil supply chain system. Additionally, the document points out that subsidies for arable land fertility protection and corn-soybean producer subsidies will be stabilized, and agricultural insurance guarantees will be strengthened to further mobilize farmers' enthusiasm for growing grain.
II. Oils and Oilseeds: External Harvest Pressure Weighs, Domestic Inventory Accumulates
In the international market, the harvest progress of Brazilian soybeans has accelerated, with bright prospects for a bumper crop, leading to recent downward pressure on CBOT soybean futures. With the end of Spring Festival stockpiling, domestic downstream demand has seen a seasonal decline. Oil mill operating rates are gradually recovering, and soybean meal inventories have begun to accumulate again.
As of late February, domestic soybean meal futures prices showed a weak adjustment trend. The DCE soybean meal main contract, affected by the ample supply expectations from Brazil and sluggish US soybean export data, closed lower than before the holiday. Regarding vegetable oils, although rising international crude oil prices during the Spring Festival briefly boosted the vegetable oil market, the weak performance of the palm oil market dragged down the overall oil sector. Currently, downstream consumption at oil mills is in the off-season, with purchases made mainly on demand. It is expected that spot soybean oil prices will fluctuate and adjust in the short term, lacking momentum for an active rise.
III. Feed Raw Materials: Tight Corn Supply-Demand Balance, Persistent Losses in Breeding Sector
The corn market demonstrated strong resilience in February. Affected by the lingering Spring Festival atmosphere and rain/snow weather in some regions, logistics were restricted, and surplus grain at the grassroots level in major producing areas continued to decrease, leading to a temporary tightness in effective market supply. This caused spot corn prices to generally trend stable to strong in early to mid-February, with some enterprises in North China slightly raising purchase prices due to restocking needs. However, analysts predict that as temperatures rise and logistics recover, the probability of corn prices trending slightly weak in late February will gradually increase.
On the by-product front, DDGS (Distillers Dried Grains with Solubles) prices saw a slight increase, supported by high raw corn prices and the price-holding mentality of alcohol enterprises facing production losses.
The downstream breeding industry faces significant pressure. According to data from the Price Monitoring Center of the National Development and Reform Commission, as of the second week of February, the national average live pig price fell to 12.75 yuan/kg, a month-on-month decrease of 3.26%; while the average feed price was 2.66 yuan/kg. The pig-feed ratio dropped to 4.79, with an estimated loss of 134 yuan per head of live pig. Continued losses in the breeding sector have limited the upside space for feed prices, making feed enterprises more cautious in raw material procurement, mostly adopting rolling procurement strategies to maintain low inventory levels.
IV. Future Outlook
Looking ahead to March 2026, China's grain and oil feed market will continue to seek a balance between policy expectations and real supply-demand dynamics.
- Policy Implementation Effects: As spring plowing approaches, if further detailed rules regarding the oilseed expansion policies in the No. 1 Central Document are implemented, they may boost intentions for planting new-season domestic oilseeds.
- Mitigation of Import Shock: Close attention should be paid to the actual shipping rhythm of Brazilian soybeans and the latest developments in Sino-US trade relations. If import costs stabilize, domestic soybean meal prices may stop falling.
- Demand Recovery Node: As temperatures rise, if sentiment for restocking in the breeding industry improves, feed demand is expected to turn around in mid-to-late March, thereby supporting a stabilization and rebound in corn and meal prices.
Overall, China's grain and oil market in early 2026 is in a period of both pain and opportunity during structural transformation. Market participants need to guard against short-term risks brought by fluctuations in macro capital sentiment and weather changes, while closely following national policy orientations to optimize operational strategies.
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