Daily Report 300615 2015-06-30
Macro Economy
According to the notification of solicit public opinion from Ministry of Finance of the People's Republic of China, China plan to allow benchmark pension insurance to invest stock market; the ratio of investing stock, equity fund, commingled fund and equity pension product, cannot above 30% net value of fund assets. Yesterday CSRC statues it is disadvantage for stabilized stock market if retracement is too fast. There is sound from foreign media that China is considering pausing IPO to cope with stock collapse.
Overall, the stock market retracement after economic index improving tallying with our expectation but, the speed of retracement is over the prediction. Under the circumstance of weakened liquidity thrust and shattered confidence in later stage, there is difficulty of soaring rally and, require for the continuously improving real economy to drive in a long term.
 
 
Soybean
Soybean No.1 contract continues felling with adjustment, spots price in partial northeast area further dropping; currently division of spots is serious, lacks of high quality grain resource, surplus grain in Heilongjiang Province is near 15%, it is predicted an unsound demand; clearing out the surplus grain will continue the weaken trend.
Soybean meal appears profit taking after interim rally, spots are basically stable, and the short period is still in strong trend; on account of a huge amount soybean port arrival in this month and next month, the pressure to market is still from supply side; recent soybean meal maintain increasing after the U.S. market, there was strong dependency of this rebounding trend; need to pay attention on the performance of U.S. market after report.
As for operation, we recommend slightly and progressively holding soybean meal in long positions.
 

PP
Yesterday PP futures continues volatile, opened at 8699 and ended at 8621, trading volume decreased 29,488 lots to 464,000 lots, and holdings decreased 20,076 lots to 402,000 lots. In upstream side, FOB Korea PP increased $12; average price was 970.5/ton. As for spots perspective, yesterday domestic PP price mainly stable. The investing and trading is thin, market tends to observe; most market shipment is worse than last week. Merchant fluctuating according to supply and demand, quotation remaining stable; downstream plant had limited demand of receiving since prior appropriate coving.
Yesterday main quotation of wires, north market was RMB 8450-8600/ton, east market was RMB 8700-9100/ton and south market was RMB 8650-8850/ton.
As for operation, current price continues volatile, though moving average system still bolster the price, the upward momentum is thin. There is high possibility of further volatile recently, we recommend keep observing.
 
 
                                                                       Dong LV (Investment Certificate NO. TZ008452)