Daily Report 090615 2015-06-10
Macro Economy
Yesterday U.S. stock dropped, S&P 500 index dropped to lowest price from past two months, aviation and semi-conductor stock slumped, in addition, investors considered opportunity from FED rate rising and prospect from Greek debt negotiation. As for Euro side, Greek still in progress of negotiating to creditors, Greek finance ministers claimed debt burden need to be linked with economic growth. President Barack Obama considered, G-7 and IMF thought it’s urgent to find a solution on Greece's problems.  A source says German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble had larger and larger divergence on Greece's problems; the former preparing concession to remain Greece in Euro zone but, the latter tends to make Greece exiting it. Noyer-the European central bank management committee members indicated, Greece defaulted debt might not hammer the euro zone; cause euro zone had built a “Firewall” since sovereign debt crisis. On the whole, as the deadline of negotiation is approaching, risk from Greece debt problem will increase; attitude of German will be the crucial.
In domestic, yesterday data indicated that Chinese export decline range had substantially narrowed to -2.5% in May, continues dropping for 3months; import decline range expanded to 17.6%, continues dropping for 7months and far worse than expected; trade surplus substantially expand to USD59.4 billion. Along with U.S. economic improved from Q1; Euro bailed out influence from deflation; RMB fell back following the U.S dollar; external demand continues weaken situation had temporally relieved; which made export decline range narrowing, but import decline range expanding still indicated domestic demand is low. It is predicted export will hit fluctuant afterwards, weak status is hard to transform, government quantitative easing is expected to release.

Soybean
Soybean No.1 Contract futures price decreased RMB200/ton after it hits the pressure from warehouse receipt cost area, broke through bolster of RMB4300 ; since soybean spot price slightly rally recently, soybean futures price will get bolster from it,  we recommend previous short holdings may unload under RMB4300.
Soybean meal spots price continues dropping, oil plant mainly sales prophase contract, downstream purchase in cautious, arrival soybean amount in May is lower than predicted, partial shipping date postpone to end of June, supply pressure in the future still plainly leading to bear market.
As for operation, we suggest investors who hold soybean meal short when the price rallies, previous short holdings are recommended to be held further.

PP
Yesterday PP futures opened up in high position then followed with downward trend, opened up RMB 8500, closed at RMB 8402, the volumes dropped 163,000 lots to 323,000 lots, and the holdings dropped 2576 lots to 443,000 lots. On the upstream hand, FOB Korea propylene price increased USD5; average price was USD950.5/ton. On the spot side, yesterday domestic PP market remained stable, partial market price rallied slightly. Partial petrochemical enterprise decreased ex-factory price which further weaken the market bolster. PP futures opened high and went low which busted the market. Under the influence, merchant made shipment following the trend and wait for market reaction; majority of downstream factory bought in as production condition, market was in wait-and-see status and, volume mainly based on rigid demand.
Main quoted wires prices of north, east and south markets are RMB 8600-89000/ton, RMB 8800-8950/ton and RMB 8700-8950/ton, respectively.
For operation strategy: currently focus on price volatile had moved up, but due to lacking of domestic supply and demand recently; it was predicted upward position would be limited, we recommend waiting for now. 


                                                     Dong LV (Investment Certificate NO. TZ008452)