Daily Report 030816

Soybean
Domestically, during the process of price decline, oil against meal ratio increase is the high possibility event. Northeast China soybean price is stable. Old soybean sales price is about RMB 3700-3800/ton. Recently market trading direction tends to old grain outbound. Now the trading is weak. Soybean meal side, actuals price of several places reduced RMB 50-80/ton. Forward soybean cost decline and domestic soybean meal lack of needs suppress the buying section. Recently market trading is weak, and observation attitude is obvious. Terminal market delivery is slow, and soybean meal storage of oil plant is serious. Several oil plants of some districts have already changed to low output line or stopped processing. As for operation, we consider forward soybean tendency will continue fluctuation and downward. Recommend short with low volume or arbitrage with buying oil and selling soybean meal.
 
PP
Yesterday PP futures continued fluctuation; opened at 8230 and closed at 8315. Trading volume decreased 13736 lots to 360000 lots. Holding volume decreased 6314 lots to 621000 lots. Actuals side, yesterday domestic PP market adjusted at high point; price continued increasing RMB 50/ton. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 7950-8100/ton, RMB 8200-8450/ton and RMB 8150-8250/ton, respectively. Currently moving average system twines. MACD green column shortened, and recently will continue fluctuation. 
 
Stock Index
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. Real estate refinance is forbidden to be used for buying land and paying loan. Thirdly, CIRC: prevent insurance company becomes financing platform and “cash machine” for substantial shareholders.
In general, the government is pushing forward supply-side and state-owned enterprises reforms under precise financial policy while being cautious about bubbles. It is difficult to increase, but also lack the possibility of deeply drop. Technically will adjust temporarily; recommend fluctuation idea of mid-term.
 
Copper
Tuesday copper market rushed high and rolled back. LME physical discount narrowed $2.25 to $11.25. Inventory decreased 425 tons to 210000 tons. Supply side, recently 16 mines companies have released performance report of second season. Output increased 9.42% totally. From five mines with increasing output, Cerro Verde continued increase. Grasberg ore quality increased. Buenavista expand project has completed on time. Sentinel will reach commercialize production of the third season. Las Bambas output will continue release after commercialize production. Overall, supply pressure of the second-half year will continue. Technically, copper price is under fluctuation, short-term pay attention to bolster effective. LME is $ 4830 and domestically RMB 37500.
                                                                                   Dong LV (Investment Certificate NO. TZ008452)