Daily Report 310516 2016-05-31
Domestically, DCE soybean night section rolled back yesterday’s increase range. Soybean meal fluctuated heavily. Oil against meal ratio is still weak. From spot goods side, the tendency of South China and North China is different. Because of shortage of grain supply, price of partial areas increased by RMB 40/ton. Now filtered grain average purchase price is RMB 3897/ton, back to the price level of August 2015. The sales market turns weak since sale reflection is flat. Tomorrow storage soybean begins auction, pay attention to dealing price and turnover. Short term price is under consolidation stage. Soybean meal side, spot goods price increased RMB 20-30/ton. Dealing of forward basis is good. Market is cautious about high price spot goods. Oil plant quotation is around RMB 2950-3020/ton. 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, and the ratio is 2.037:1.

Monday LME market closed because of Banking Holiday; domestic night section continued drop. Blahd form the Fed claimed that the global market might have prepared for interest hike, and claims that US second-quarter GDP increase rate is hoped to recover; but still hold reserve opinion for June and July interest hike. Recent the expectation of Fed interest hike in summer bolstered US dollar, and short copper price. Back to copper price, domestic spot goods premium decreased 5 yuan to premium 40 and premium 80. Traders and downstream buyers are not active; copper spot market is flat and is significant at the end of month. From supply side, Chile government claims that April copper output decreased 8.2% to 432000 tons. Because some mines are reflected by heavy rain and the level of ore decreased. El Teniente of Chile National Mines and Los Bronces of Anglo American were influenced, whose copper output were 466000 tons and 402000 tons separately. But Chile claimed that the loss of El Teniente closing will be recovered later. Chile copper output was 183000 tons for the first four months, decreased 4.7% year-on-year. The accumulated amount is influenced by April output. Technically, recently copper price is rallying, and fluctuation in short term can’t avoid. Observe first and wait for new opportunity.

Yesterday PP futures opened low and rose; opened at 6390 and closed at 6587. Trading volume increased 35204 to 0.615 million lots, and holding decreased 7702 to 620000 lots. Spot goods side, yesterday domestic PP market slightly swung out of stabilization, some rate goods quotation is 50 yuan higher. Under the bolster of Sinopec, traders’ attitude is stable. Sellers sell refer to market price. Bolstered by Sinopec reducing supply at the end of month and boosted by futures market raise, some traders try higher quotation. Downstream factory continues purchase with needs; trading and investing atmosphere is normal. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6800-6850/ton, RMB6850-7000/ton and RMB6750-6850/ton, respectively. Current moving average system still arranged in short; MACD shortened. Downward motion is not enough; recommend for observation.
                                                                             Dong LV (Investment Certificate NO. TZ008452)