Daily Report 040816

Soybean
Domestically, during the process of price decline, oil against meal ratio increase is the high possibility event. Recently trading was weak. Recent price drop is because of national inventory soybean auction and US soybean dropped again. Soybean meal side, partial districts actuals declined RMB 20-30/ton. Coastal oil plant quotation kept RMB 3050-3080/ton. Soybean meal price continued drop. Market observation mindset is strong. 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.
 
Stock Index
Yesterday stock index continued slightly fluctuation. 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
Wednesday copper market continued fluctuation. Copper price dip to $ 4820, and then rallied some loss. LME physical discount enlarged $ 4.25 to $ 15.5. Inventory continued reduced 2300 tons to 207000 tons. Supply side, since Free Port claims Grasberg ore quality difference causes seasonal and yearly copper output fluctuation. Rio Tinto reduced 2016 copper output expectation to 545000 to 595000 tons, decreased 30000 tons; but increased 8.1% to 18.1% year-on-year. 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)