Daily Report 250516 2016-05-25
Domestically, DCE soybean night section recovered. The fluctuation of soybean meal shakes the oil meal ratio. Spot goods side, spot goods price is stable, basic level purchase and sales is deadlock. North China dry land ended sowing, and soybean area increased significantly compared to last year. Part of the area increase range reached 50%. Now Hei Longjiang filtered grain purchase price is RMB3900-3960/ton. Both purchase and sales are weak. In the short term, since surplus grain ratio declined significantly, under the background of soybean storage auction suspension, the lack of supply will boost price increase. The price is strong in long term. Soybean meal side, spot goods market recovered RMB 40-70/ton. Spot goods market sale is normal. Few far contract basis trading is good. US soybean is weak. DCE soybean meal night section rolled back. Import soybean inbound volume increased; domestic spot goods price hence rolled back. Since we hold the opinion of fluctuation and strong tendency for US section, and domestic breeding recovery situation is good, soybean meal is long in the middle term. As for operation, soybean meal long position is held when rollback happens, and arbitrage between oil and meal observe temperately.

Tuesday copper market continued slightly rally; stocked at early April low point. Market is chaos recently. From macro perspective, US data turns better. Market holds the opinion that possibility of May interest hike is more than 50%. Tuesday US new house sale is more than expected, which is the biggest increase range since 2008. But crude oil is still high. The worry about supply suspension maintains oil price on the high point. Overall, stronger US dollar and China construction adjustment is main point. We consider this as market pressure. From basic level, LME spot goods premium increased $5.5 to $21. Storage increased 2250 tons to 157000 tons. Domestic spot goods premium increased 10 yuan to premium 50- premium 90. Downstream delivery is active. Recently copper price decreased to near RMB 35000; domestic consumer is approval to this price. Considered macro side and off-season, we hold cautious attitude. From industry data, 2016 January to April domestic air-conditioner output decreased 10.2% month-on-month. From SMM data, copper pipe enterprise average operating ratio decreased 14% to 75%. May copper pipe operating ratio is expected to decrease. Technically, copper price is under adjustment. LME resistance price is $4640, domestically ¥36800. As for operation, short position is recommended to set target price.

Yesterday PP futures opened flat and went low, opened at 6389 and closed at 6312. Trading volume increased 191000 to 0.604 million lots, and holding increased 27446 to 665000 lots. From spot goods side, yesterday domestic PP market was stable and loose; part of the price dropped RMB 50/ton. With the bolster of most Sinopec companies, trader’s profit surrender space is limited. Future market’s downward tendency stress on the market; traders deal actively. Downstream factories purchase as needs; storage follows order. Market totally investment and trading atmosphere maintains the same. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6800-6900/ton, RMB6650-6750/ton and RMB6750-6850/ton, respectively. Current moving average system still arranged in short, MACD green column lengthened, which is downward trend. A weak tendency is expected recently; short position can be held continuously.
Dong LV (Investment Certificate NO. TZ008452)