Reborn in 2012, building a new energy empire

The dinner was arranged at an inconspicuous local Shanghainese restaurant near the Bund. The private room was small, but it offered good privacy.

When Jiang Haoran arrived with Chen Jingge, there were already four people sitting inside.

At the head of the table sat a middle-aged man in his early forties, wearing a polo shirt, with a round face and bright eyes, talking to two people beside him while holding a teacup. This was Liu Jinwang.

"Old Chen, is this your nephew? He's quite a handsome young man." Liu Jinwang stood up to greet him, his tone warm but not exaggerated.

Chen Jingge gave a brief introduction: "Jiang Haoran is still in university. I brought him out to broaden his horizons."

Liu Jinwang took over the conversation and introduced them one by one: "This is General Manager Li, who specializes in feed. His company in East China is this large."

He gave a thumbs up, "Owning four factories, he's a true industrialist who rose through the ranks from the factory floor."

Mr. Li was in his early fifties, with a dark bronze complexion from years of inspecting the factory area. He had broad, thick hands with slightly large knuckles, and a genuine smile, exuding a pragmatic quality honed through years of experience in the industry.

"This is General Manager Wang, who runs a trading company. He's an expert in the grain and oil commodities business and has excellent connections," Liu Jinwang continued.

Mr. Wang looked to be in his forties, dressed in a well-tailored casual suit and wearing gold-rimmed glasses. His eyes behind the lenses were sharp and alert.

"This last one, Mr. Zhao, is an old friend of Guotai. He has a proper academic background and is now one of the company's pillars." Liu Jinwang pointed to the last person.

Mr. Zhao wore a well-fitting shirt with neat cuffs and a meticulously styled hairstyle, exuding an air of composure unique to senior managers in financial institutions—a demeanor that lies between the prudence of scholars and the steadiness of officials.

He nodded slightly, his smile standard yet distant, displaying good manners and habitual prudence.

Everyone took their seats, and the dishes were served quickly.

After a few drinks, the conversation naturally turned to business.

"Come on, everyone, let's eat and chat," Liu Jinwang, the organizer, warmly invited.

After everyone had exchanged pleasantries and taken their seats, he naturally began to speak, "These days, business is getting harder and harder, and money is getting harder and harder to earn."

"Old Chen, General Manager Wang, General Manager Li, General Manager Zhao, we've gathered here today not only to reminisce, but also to exchange information and see if we can sniff out some new opportunities in the wind."

He turned to Chen Jingge and asked with a smile, "Old Chen, you're quick-witted and have a sharp eye. Have you heard anything interesting happening in the market lately? Give us a heads-up."

Chen Jingge waved his hand, his smile carrying his usual caution: "I'm just thinking around, doing some research."

"I wouldn't dare say there are any big opportunities, but I do feel that there have been some changes in the agricultural products sector recently, though I can't quite see the bigger picture, so I'm seeking advice from you all," Chen Jingge said politely.

"President Li, President Wang, you are in the feed production end and the trade and distribution end, so you should have the most direct experience."

What is the current situation regarding downstream purchasing sentiment and spot market circulation for raw materials such as corn and soybeans?

Mr. Li slammed his teacup on the table with a soft thud, and said with a wry smile, "Mr. Chen, you've hit the nail on the head."

"The current situation in our factory is that we dare not stop production, let alone stockpile soybean meal." He held up his finger. "I have reduced the soybean meal inventory to a historical low, enough for about ten days of production turnover."

"It's not that I don't want to stock up, it's just that prices change every day, and the market is shifting too quickly. I just signed a forward pricing contract last month, and when I looked at the spot price this month, I found that I had already lost tens of yuan per ton."

He paused, his expression becoming more serious: "But downstream farmers, especially those medium and large-scale pig farms that have signed long-term supply agreements with me, have rigid demand; pigs need to eat feed every day."

Doing business with these big clients means razor-thin profit margins; it all depends on volume.

My purchasing department is currently running around like crazy, adjusting purchasing plans almost weekly, or even daily, just to squeeze out as much cost as possible.

He softened his tone slightly as he said this: "However, on the other hand, I've noticed something recently."

"Many small-scale farmers who had previously stopped farming have started to gradually increase their numbers again as pork prices recover."

"Their individual orders are not large, but the number of customers is large, and most of them pay cash on delivery, so they are not as price-sensitive as large customers."

"The scattered demand adds up to a considerable amount, and there's still a small profit margin."

Mr. Wang, who works in trade, adjusted his glasses and took over the conversation with a professional precision: "The 'thinness' that Mr. Li mentioned is most clearly seen in the data from our port."

"Two months ago, as soon as signs of abnormal weather appeared in the United States, some astute buyers began to accelerate their price-fixing process."

"The latest shipping schedule data shows that the amount of South American soybeans arriving in the next two months is lower than the same period last year."

"The new season's soybeans in the United States will not be available until September, leaving a significant supply gap in between."

He picked up his phone and pulled up a chart to illustrate: "The commercial soybean inventory at major ports like Qingdao and Zhangjiagang has now dropped to near its lowest level in the past five years."

More importantly," he looked around and lowered his voice, "there are many inquiries at the port now, but few have the actual volume and are willing to sell large quantities of spot goods at the current price."

"The sentiment in the trading community is also quite delicate; everyone is waiting for the USDA (United States Department of Agriculture) monthly report. If the report confirms the production cut expectations, then the current inventory is simply not enough."

Chen Jingge listened attentively and then asked, "Mr. Wang, based on your experience, how does this situation of 'tight supply and strong expectations' typically evolve if it is ultimately confirmed?"

Mr. Wang pondered for a moment and said, "It's very simple, the futures and spot prices will rise in tandem."

"Futures markets discover prices and drive sentiment; while tightness and premiums in the spot market will, in turn, provide the strongest support for futures price increases, creating a positive feedback loop. At that point, soybean meal prices will skyrocket."

"The futures market is currently fluctuating around 3000 points, with both bulls and bears testing the waters, all because it lacks a 'trigger point' that can convince everyone. Once that point is reached..."

He didn't finish speaking, but simply shook his head slightly, the meaning of which was self-evident.

Liu Jinwang timely summarized, bringing the topic back to reality: "In that case, upstream supply may be tightening, while downstream demand is rigid. It seems that the contradiction between them cannot be resolved in the short term."

Mr. Zhao, who hadn't said much until now, slowly spoke up: "From the market capital flows we've observed, there are indeed some astute investors gradually shifting their positions towards related agricultural product contracts."

"The logic behind this aligns with what the CEOs described about the industry situation. However," he changed the subject, "the existing data doesn't necessarily indicate a significant opportunity; we can only say we're cautiously bullish."

"In futures trading, industry logic alone is not enough; you also need precise calculations on timing, position management, and risk hedging. Industry analysis determines trends, while financial instruments are responsible for how to safely and efficiently ride those trends."

The atmosphere at the dinner table became more focused and concentrated because of this pragmatic and in-depth exchange.

Jiang Haoran matched this firsthand information with the macro data in his memory one by one, and the "opportunity map" in his mind became clearer and more solid than ever before.

Weak links in the industrial chain, mismatches in supply and demand, and the delicate balance of market sentiment... all these elements are pointing in the same direction.

Uncle Chen Jingge's seemingly casual question, in turn, has, through the collective chatter of the crowd, sketched out a rather certain outline of the potential market trend.

It was already 9 p.m. when the party ended. Chen Jingge saw off his three friends and stood with Jiang Haoran at the restaurant entrance waiting for their car.

"Remember to organize your previous thoughts and write a report," Chen Jingge said, exhaling a smoke ring. "If what you say is true, this might be an opportunity."