Daily Report 010816

Stock Index
Stock index rolled back for two continuous weeks. Now the management authorities’ basic keynotes are supply-chain reform, stronger management and control capital bubble. Firstly, CBRC strengthened bank financing capital. Secondly, the former released capital management eight bottom lines. In general, the market is more likely to be volatile, since the government is pushing forward supply-side and state-owned enterprises reforms under precise financial policy while being cautious about bubbles. We believe that the market lacks the momentum to break through due to less confidence of investors, while the support of drop is quite strong. We suggest investors to make purchases cautiously when the market sees significant drop. 
 
Nature Rubber
Last week Shanghai Rubber dropped with increasing volume. Domestic spots price is 1280-1290(-10); domestic cargo price is 1270-1280(-20); US RSS spots price is 1630-1700(-20); US RSS cargo price is1610-1650(-20); Singapore cargo price is 1290-1310(-10); Thai cargo price1310-1330(-20); mixed rubber price is 10400-10500(-100). News side, SHFX inventory totally increased 5129 tons to 351042 tons. Inventory futures slightly decreased 160 tons to 310830 tons. Overall, domestic commodity market near month is strong. The coming 150 lots limit will accelerate over-the-counter non-firm offer leave. Mature species tendency is consistent. Pay attention to black metal and PP species, and other species have a big possibility to follow.
 
Soybean
Domestically, DCE soybean rallied following overseas section. Oil against meal ratio hovered at 2:1. Last Friday inventory soybean trading volume largely decreased, which was only more than 80000 tons. Market supply was saturated. Supply pressure changed from North China to South. Auction trading volume of the first three weeks was 710000 tons. Soybean meal side, domestic needs don’t have substantial improvement. As for operation, with the continuation of US weather, later rally motion is weaker and weaker. Don’t recommend long positon.
 
Copper
Last week copper price continued high point adjustment, and blocked at average 10. Fundamental side, last week three main exchanges inventory reduced 28141 tons to 440000 tons. SHEX decreased 9503 tons, LME decreased 19675 tons and COMEX increased 1037 tons. Supply side, Chile June copper output decreased 7.7% to 474000 tons. Recently copper process cost maintained at $100-105/ton, which was highest of the year. Technically, copper price blocked at 10 days average, which was $4930 of LME and RMB 38100 of domestic. If the resistance is effective, copper price still has the possibility of drop. As for operation recommend short and stop-loss orders.
                                                                                Dong LV (Investment Certificate NO. TZ008452)