Daily Report 170516 2016-05-17
Monday copper market went through adjustment. Crude oil price continuous upward and US interest rate adjustment bolster the copper price adjustment. But under the weak global economy, we are doubt about the persistence of the two factors. China official claim that will carry forward supply-side reform constantly, which means China macro level is short in the short term, but long in the middle and long term. Copper price will continue fluctuating at low price. Back to copper price, Monday LME premium decreased $4 to $4.5, which is the lowest recently. Storage increased 2350 tons to 159000 tons. LME low storage didn’t cause spot goods nervous. Oppositely, recent storage slightly increase caused spot goods continued decline, showed that the market is weak. Domestic futures contract month shifts today, from spot goods market, copper price drop can’t attract new buyer. Global Bureau of Metal Statistics predicts that the fundamental level of copper is near balance of 2016 and 2017. Overall, copper price is under big fluctuation range; price will recovery in short term. We focus on the effective of resistance $4702 of average 10, domestically RMB 36000.

Domestically, DEC soybean rallied with overseas section; oil plant ended drop, and oil against meal ratio is 2.14:1. From spot goods side, Northeast China soybean spot goods price continued going upward; Heihe, Suihua district high quality soybean price increased RMB 20-40/ton. Basic level gross grain price increased to RMB3800/ton. From soybean meal side, spot market is mixed with up and down; port oil plant quotation was around RMB 2880-2950/ton. Price of some areas rolls back following US market, and dealing volume decreases significantly. Market purchase begins to be prudent. From mid and long term, as a result of overseas section strong tendency, and domestic cultivation recovery situation is good. DCE soybean will continue fluctuation upward situation following US market. Hold long position after call back, and be cautious about short position. As for operation, soybean long position can be held, and arbitrage between oil and meal observe temporarily.

Nature Rubber
Last day Shanghai rubber ended drop with fluctuation, US spot goods market price didn’t change: domestic spots price is 1360-1370(0); domestic cargo price is 1350-1360(0); US RSS spots price is 1570-1590(0); US RSS cargo price is 1600-1610(0); mixed rubber price is 10600-11700 (0). Overall, after we indicated market weaken at the beginning of this month, domestic industry and Shanghai rubber are in a rush. Yesterday night section the price went down below average 60, and is expected to keep weak.

Yesterday PP futures opened flat and went low; opened at 6807, and ended at 6691. Trading volume decreased 180000 to 0.679 million lots, and holding decreased 314 to 509000 lots. From spot goods side, yesterday PP market price adjusted. Market lacks significant news at the beginning of the week. Observation atmosphere is obvious, and traders sell with market price. Downstream factories purchase with dealing. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6750-6900/ton, RMB6850-7000/ton and RMB6700-6900/ton, respectively. As for operation, current moving average system twisted, and the tendency is fluctuation; focus on performance around average 60.
                                                     Dong LV (Investment Certificate NO. TZ008452)