Daily Report 260716 2016-07-26
Stock Index
Stock index rushed high, rolled back and slightly fluctuated and former high position. In terms of adverse side, currently there is no leading sector in a clear sense. Though the reforms are firmly pushed forward, no incident is beyond the market expectation. Under the circumstance of structural contradictions, the uncertainty of future remains high. Thus sometimes the market tends to be optimistic because of the reforms, and sometimes it tends to be pessimistic. The economic data of July is in line with market expectation in general and in accordance with the L shape. Speaking of external environment, G20 releases the draft on which the promise concerning exchange rate is reiterated and the protectionism is boycotted. The outside environment tends to be stable. We expect the market to be volatile and the IF has reached prophase support level, so it is recommended to make some tentative purchase when the price seems attractive.

Yesterday PP futures opened low and dropped; opened at 8148 and closed at 8057. Trading volume increased 7258 lots to 439000 lots. Holding volume decreased 6474 lots to 744000 lots. Spot goods side, yesterday PP market was slightly fluctuated, and partial price slightly deceased RMB 50/ton. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 7800-7900/ton, RMB8050-8150/ton and RMB8000-8150/ton, respectively. Currently moving average system twines. MACD green column lengthen, which is rolling back tendency. Recently observe near 8000 points.

Domestically, DCE soybean rolled back following overseas section. Oil against meal ratio hovered at 2:1. National inventory soybean auction became the main bearish factor of Northeast China price drop. Actuals price rolled back form high positon. Soybean meal side, most domestic soybean meal actuals price largely dropped. Individual districts and oil plants stopped quotation. Fluctuation range is between 30 and 80. Trading main body is stable and tending weak. Domestic import soybean supply is sufficient. Recently actuals price dropped continuously. Market observation attitude is obvious. What’s more, forage enterprise storage is large, which need time to consume. As for operation, with the continuation of US weather, later rally motion is weaker and weaker. Don’t recommend long positon.

Monday copper price was weak, and fluctuated at average concentration area. Fundamental side, Monday LME inventory continuously slightly decreased 1375 tons to 221000 tons. Actuals discount enlarged $3.25 to discount $12.25. Supply side, Chile occurred earthquake, and Salvador was partly closed after earthquake. Salvador had an output of 49000 tons in 2015. CODELCO north district operates normally after earthquake. What’ more, Southern Copper output of second season increased 26.1% year-on-year to 226000 tons. The main reason is Buenavista output climbed 78%. This firm is expected 2016 copper output increase 23% to 913500 tons; 1.65 tons less than former expected 930000 tons. Technically, copper price stressed at 5 day average. If this stress is efficient, copper price has the possibility to rolling back to $4700. If domestic copper price broke 5 week average of RMB 376000, downward space will open.
                                                                       Dong LV (Investment Certificate NO. TZ008452)