Daily Report 120516 2016-05-12
Wednesday copper market still lacks the power of rallying; price narrowly fluctuated at low point. The overnight USD slumps, creating large pressure on the drop of copper price. In the short term, we need to judge from the further trend of USD. Currently, the statement from the authority is unlikely to be stimulating and structural reform is the focus, which is different from the basic tone in the mid April. The macro data expected on Saturday could bring pressure to copper price. Back to copper market, LME spots premium decreased $1.5 to $9.75; storage continuously increased 725 tons. This is the seventh straight increase of LME storage and the accumulative storage is 12000 tons. The increase of storage also stress on copper price. Domestic spot goods premium increased RMB 10, which is premium 10 to premium 40. Downward continue buy goods at low price, and yesterday dealing is active and well continued; traders lead the market dealing. Technically, copper price dropped below bolster this year, which is $4750 of LME and RMB36080 of domestic. We will focus on whether this resistance is effective in short term.

Domestically, DCE soybean night section meal increased, but oil dip; oil against meal ratio rolled back. From spot goods side, price of north and south stay stable. Heilongjiang standard soybean filter goods purchase price is 3840-3900/ton. Nowadays South China processing enterprises and traders reduce enthusiasm to spot goods purchase. Market focus turns to old grains. This causes spot price upward bolstered. With the bolster of US section and external favorable factors, domestic soybean keeps strong operation tendency, but price rising space is not big. From soybean meal side, yesterday spot goods price was increased RMB100-120/ton. Oil plant quota is between RMB2800-2900/ton. Overnight USDA report is favorable; domestic spot goods price will increase. As for operation, soybean long position can be held, and arbitrage between oil and meal observe temporarily.

Yesterday PP futures fluctuated at high point; opened at 6733, and ended at 6765. Trading volume increased 154000 to 0.609 million lots, and holding decreased 8570 to 512000 lots. From spot goods side, yesterday domestic PP market stabilized, and some quotas are even high. PP futures open high and went high, but observation atmosphere is strong; trading is limited at high price point, and factory purchasing is appropriate. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6650-6800/ton, RMB6750-6850/ton and RMB6750-6900/ton, respectively. As for operation, current moving average system changes to downward, MACD green column shortened; price is continuously fluctuated near 60 average line, and the bolster line of 6650 is obvious. We recommend observation.
                                                                   Dong LV (Investment Certificate NO. TZ008452)