Daily Report 040315 2015-03-04

Main contract of domestic gold AU 1506 dropped slightly in the night session, increasing fluctuations in the short term. It is believed that the trend afterwards may be determined soon as moving averages stuck close at RMB 247. In terms of trends, the gold shows a downward drift based on the weekly trend lines. However, bolster effect was found around RMB 244, which may leads to fluctuations recently. As for the 250-day moving average, it is hardly likely for it to break through RMB 252. Previous short positions opened at RMB 254.5 could be closed. Sound investors are recommended to pay attention to the operational opportunities after the gold breaks through the region between RMB 244 and RMB 250. The US non-farm payroll of February will be released this week. Investors are recommended to trade cautiously before the release of data. The market risk-aversion sentiment is cooling down as the Greece and Ukraine’s political risk is fading away.


Main contract of domestic silver AG 1506 corrected slightly in the night session. Pressure was found at 60-day moving average in short term. A downward trend is expected to take place after the triangle convergence region is broken through. It is believed the silver may remain a downward trend afterwards. Previous short positions opened at RMB 3800 could be held. Defensive moves should be prepared at RMB 3700. However, if silver increasingly fluctuates during the intraday trading, investors could open small short positions, with the stop-loss setting at RMB 3630 and stop-profit setting at RMB 3500.

Stock Index

Stock index plunged yesterday dragged down mainly by heavyweights. Two reasons are believed to have caused this situation. One is previous positive news finally come true. The other is reverse repurchase of RMB 35 billion with the rate of 3.75%. Under the circumstance, the trend afterwards is unclear. However, it is believed that there is still space for easing policies. Besides, there is concern that whether the easing currency can be turned into real economy. Investors are not recommended to make moves before the following policies are released.


Overnight U.S soybean continues its callback trend, after the Brazil strike gradually ease the short term bullish will quit the stage slowly. Worldwide soybeans supply and demand structure does not have a substantial change;It leads to the fluctuating platform of U.S. soybean increased. As Brazil strike eased,the quotation would more likely to bare the supply pressure of listed south American soybean.
In domestic market, overnight soybean meal fell back which followed with the foreign market;Soybean no.1 contract appears fluctuated. Yesterday among most soybean meal spots markets the price was dropped RMB 20 per ton; the mainstream quotation is above RMB 3060-3120 per ton; the temporary futures rally may end up so remain to stop profit of long positions when the price is high.
Soybeans No. 1 contact is fluctuating below RMB 4300 per ton, in short term it still appears weak in performance. Domestic soybean still remains its trend before Chinese New Year. Currently the trading volume is in small amount; also current situation is hard to attract more merchants to join in the market. In terms of operation, long positions of soybean meal continue to stop profit; wait and see how soybeans No. 1 contract may perform.


Yesterday PP futures opened up high and followed with a high trend. It opened at RMB 8582 and closed at RMB 8447. The trading volume decreased 288000 lots to 585000 lots; the holdings decreased 24758 lots to 237000 lots. For upstream, the Far East propylene price increased $60, the average price is $995.5. In terms of spots, yesterday domestic pp market quotation is increased dramatically.
Like wire drawing, today's mainstream of north China bid in RMB 8420-8650 per ton, east China mainstream quotation in RMB 8500-8800 per ton, south China mainstream quotation in RMB 8800-9000 per ton.
From the quotation, current price is still in the upper line, but yesterday there is a great dropping of holdings and current price is close to previous cost base; all these figures suggest that PP price requires a callback. However, the upstream has strong support to current PP price, therefore recently it is more likely that PP price will fluctuate.
Dong LV (Investment Certificate NO. TZ008452)