Daily Report 040716 2016-07-04
Macro Economy
Domestically, last statistical bureau data showed that June manufactory PMI decreased to 50, and worse than prediction and former. Non-manufactory industry slightly increased to 53.7. Specifically, productivity data increased to 52.5, but industry cost and material storage decreased, which showed enterprise had the motion of increase storage. But new orders and new export orders all rolled back, which showed need situation is still bad, especially overseas needs. We maintain the opinion that the economy of second-half year will still under stress. But at the same time, construction industry especially construction new orders index soared. The former estate industry stability may transmit to upward, so economy may still keep downward tendency.

Domestically, DCE soybean closed with increase last Friday. But since US section rolled back, domestic increase tendency slowed down. Spot goods side, last week domestic soybean spot price increased stably. Food soybean purchasing price increased to RMB 4100-4120/ton. Shortage of supply decreased trading volume. Market supply and demand gap may expand after July, which may boost spot goods price. Soybean meal side, spot goods price is stable. Coastal oil plant quotation is around RMB 3480-3550/ton. Recently soybean meal storage has no pressure and partial plants appear tense situation. Several plants are under repair may cause market supply short-term under stress. Bolstered by cost, oil plants are willing to boost price. For DCE soybean operation: cautious for chasing increase, and long for the middle-term.

Last Friday copper price first rolled back then got bolster; copper price continued soar, and LME rushed to $4936. Domestic price rushed to RMB 38310 then rolled back. Vice president of the Fed claimed in an interview that have to observe how referendum will affect US and global economy, which is understood by the market that interest hike won’t happen at July, and will boost the copper price. Friday bulk commodity mostly increased; non-ferrous section increased following nickel. Copper price was weaker than others, but still increased 1.26%. VIX data rolled back from the highest 25 after referendum to 14.77. Market risk preference increased. Friday Europe and US stock market all line increased, which bolstered the copper price. From fundamental side, last Wednesday three exchanges storage increased 5549 tons to 416000 tons. SHFE storage increased 6659 tons; LME decreased 2850 tons and DOMEX increased 1740 tons. LME spot goods discount increased to discount RMB 11.5 after continuously four days decrease. Technically, $4940 is the bolster line of the upward trend before May; copper price differ a lot when reached this price. Concentrate on price around the bolster positon.
                                                          Dong LV (Investment Certificate NO. TZ008452)