Daily Report 120815 2015-08-12
Copper
Tuesday LME copper price lost the Monday raised range and, domestic copper price edged down. Market is focusing on PBOC has reduced RMB exchange rate 1000 point or devalued over 1.8% in Tuesday. Tuesday global stock market slumped; Asian currencies sharply devaluated; US dollar currencies as well substantially fluctuated; market speculated this would impact on September US dollar raise interest rate. In conclusion, devaluation of RMB can be comprehended as two points:  first, the global currency war is coming to a kind of crescendo and, second is Chinese economy weakness. We regard this as a sign of RMB liberalization and, lay a foundation to China come into SDR ultimately. The directly impact to copper market is ratio from inside and outside will increase, since RMB devaluates 1.8% the import balance ratio will increase from 7.41 to 7.54; from the Tuesday reality, ratio is 7.60 and, it is estimated that stagnant and tumble situation in Wednesday domestic copper price will vanish. On fundamental, Tuesday LME copper price plunged, spots discount extended from $10 to $13; inventories increased 825tons; domestic spots discount RMB 150 to RMB 50; consumers was suspicious of copper price rally trend.
Overall, we consider recent macro side is complex and copper price cannot get rid of weak trend in short time. LME resistance is $5340, and in domestic is RMB 40000. We recommend stay in waiting as for operation.
 
 
Soybean
DCE soybean retraced in nigh session followed overseas market; soybean No.1 contract spots continued soaring; current domestic soybean price had been unable to reacted the practical situation and, we considered that the import soybean flow direction inspection was based on the persistence in late period, current traders in production areas were reluctant to sell out which had caused spots irrational raise; we predict short tendency on soybean No.1 contract would be stronger than the soybean sector but, the further raising scope from present level would be limited.
Soybean meal spots in most areas continue raising RMB 40-70/ton; quotation is RMB 2800-2850/ton; rising from domestic market is driven by cost. Domestic supply-demand environment is relatively stable; soybean meal will still be the game of demand and supply and pay attention on the influence to soybean sector from Wednesday report. We recommend holding slight positions in short term or observing.

 
                                                                     Dong LV (Investment Certificate NO. TZ008452)