Daily Report 200516 2016-05-20
Domestically, DCE night section rallied all line; oil against meal ratio is 2.073:1. From spot goods side, price of North and South production place remain stable. Heilongjiang and Jilin after filtered purchase price is RMB 3800-3900/ton. The price of Neimeng district is a little high. Now after filtered quotation is RMB 3900-4000/ton. Basic level supply shortage is obvious; spring sowing leads into a stalemate over the purchase and sale. Market goods sauce is lack and traders purchase volume is low. From soybean meal side, spot goods price decreased RMB 20-40/ton; quotation is between RMB 2900-2980/ton. Oil plant inventory recovered, and operation rate is high. Oil plant is willing to bolster the price, but with the port inbound increases, pressure comes later. 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.

Thursday copper market went downward with fluctuation, and the lowest price is $4540; then rallied and withdrew most losses. Yesterday the possibility of June interest hike raises; two Fed officials boost the tendency of public view, and indicated the possibility of interest hike this summer. US index increased to 95.502. Copper price still bolster stress. From fundamental level, LME spot goods premium increased $3 to $13.75; inventory continued increased 1750 tons to 159000 tons. Domestic spot goods turn to premium 40 – 80. But downstream is still under observation, and the market is lack of purchasing. From supply side, Poland KGHM enterprise is trying to increase mine operating efficiency; the target is 1 million at 2020. This company produced 421000 tons copper last year. First-quarter this year is 155000 tons, increasing by 6%. Sierra Gorda increased 26000 tons, which was 4000 tons of the same time last year. Overall, copper market is still weak, and the operation is will short; target profit is at average 10.

Yesterday PP futures continued fluctuation at low point, opened at 6577 and closed at 6554. Trading volume decreased 95030 to 0.642 million lots, and holding increased 22642 to 593000 lots. From spots side, yesterday PP market price adjusted. Today North part of Petro China factory price increased. But futures market opened low and went downward. Market is under observation and trading volume is not high. Downstream factories purchase with needs. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6800-6900/ton, RMB6800-7000/ton and RMB6750-6950/ton, respectively. As for operation, current moving average system changes to downward; the price dropped below average 60. If the price is stable below average 60, then downward tendency can be confirmed; can short at the high point.
                                                                 Dong LV (Investment Certificate NO. TZ008452)