Daily Report 270616 2016-06-27
Soy bean
Domestically, DCE mixed with up and down. Soybean No. 1 contract fluctuated and tend strong. Soybean meal rolled back following overseas section. Soybean meal ratio is still at low-point sideways. Spot goods side, Northeast China area spot goods market price continued increase. Now the average purchasing price of main output areas is RMB 4010/ton. The surplus grain is running out, and traders purchase is not in a big scale. The gap between supply and need enhanced the price. Since US section rolled back and soybean in the store auction is uncertain, domestic market is cautious. Soybean meal side, spot goods continued sideways fluctuation, costal oil plant quotation is around RMB 3360-3450/ton. Domestic import soybean supply is sufficient, and only some soybean delayed because of port exam. Feed mill and farmers are not that active to stock up, or as a result of buying as needs, or because of buyer purchased much forward contracts before. Domestic soybean meal price is expected to be resist to drop. Pay attention to the US soybean callback and area report at the end of month. As for operation: observe before report release.

Last Friday copper market fluctuated a lot. Copper price decreased 4% since UK retreat EU side is at advantage. But finally withdrew most loss and closed with 1.6% dip. Since RMB devaluated, domestic copper price decline range is limited. Recently, Brexit has a long way to go, and people are willing to hold the referendum again. Market’s divergence about Brexit is big. On the one side is worry about the domino effect of program trading. On the other side is worry about the retreat EU impulsion of Netherland and France. We consider non-ferrous market embodies most market risk, and will have a strong tolerance for this factor. But short-term risk control also should be first. Fundamental side, last week three main exchanges overall inventories decreased 14000 tons to 41000 tons, including SHFE decreased 10900 tons. And bonded area storage decreased 20000 tons to 58000 tons. Decreasing storage bolstered the copper price. CFTC data shows that the positon decreased a lot, which is the motion of copper price rebound. Market’s divergence of copper price is large, and we consider copper price has already reflected the surplus fundamental side and weak economy. The downward space is limited; wait for the macro risk release in the short run.

Last week PP futures continued increase. Upstream, till last Friday night, FOB Korea propylene average price was $694.5/ton. Spot goods side, following increased futures price, Sinopec continued increase factory price. Market bolster cost increased, and spot goods price increased. Downstream purchase as needs, and market trading and investing is good. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 7200-7300/ton, RMB7450-7550/ton and RMB7250-7350/ton, respectively. As for operation, current moving average system changes; MACD spread upward, which is a strong tendency.
                                                                   Dong LV (Investment Certificate NO. TZ008452)