While domestic investors are enjoying the May Day holiday, the global financial market is turbulent and continues to operate with high volatility in the early period. Overall, U.S. stocks initially declined and then rose during the holidays, with international crude oil prices rebounding strongly and precious metals falling slightly. In the agricultural sector, Malaysian palm oil, U.S. cotton, and U.S. soybeans closed down, with U.S. sugar leading the gains.
Spurred by news such as the gradual restart of the economy and the reduction of crude oil production, international oil prices surged on the 5th. As of the close of the day, the June NYMEX WTI crude oil futures contract rose $4.17 to close at $24.56 a barrel, an increase of 20.45%. The ICE Brent crude oil futures July contract rose $3.77 to close at $30.97 a barrel, an increase of 13.86%. During the holidays, the June contract of NYMEX WTI crude oil futures rose by more than 50%, and the July contract of ICE Brent crude oil futures rose by more than 20%.
Yesterday, US President Trump could not hide his excitement on social media: “Demand is picking up and oil prices are rising really well!”
The domestic market is about to open, A-share investors are about to return, and commodity traders will also usher in the “long-lost” night trading. How will the domestic market digest the changes in the internal and external markets during the “May Day” holiday?
International oil prices rebounded strongly
As the “King of Commodities”, international crude oil is a well-deserved hot spot recently. Recently, the crude oil market has begun to rebound strongly from low levels after the liquidity crisis was resolved.
Spurred by news such as the gradual restart of the economy and the reduction of crude oil production, international oil prices surged on the 5th. As of the close of the day, the June NYMEX WTI crude oil futures contract rose $4.17 to close at $24.56 a barrel, an increase of 20.45%. The ICE Brent crude oil futures July contract rose $3.77 to close at $30.97 a barrel, an increase of 13.86%. During the holidays, the June contract of NYMEX WTI crude oil futures rose by more than 50%, and the July contract of ICE Brent crude oil futures rose by more than 20%.
Previously at the end of April, the market was worried about the possibility of negative prices in front-month contracts again, and moved positions in advance, especially It was the early transfer of positions by index funds that caused the main WTI contract to fall to around US$6.5/barrel.
“From a disk perspective, we believe that the time for consistent panic has passed. There is a possibility of improvement in the fundamentals of crude oil in May, and there is a gap in expectations.” Everbright Futures Research Institute Energy Chemical Director Zhong Meiyan said that from the supply side, the entire market supply, especially OPEC, surged in April. Saudi Arabia’s April production increased to 11.39 million barrels per day, an increase of 1.4 million barrels per day; the UAE’s production increased to 3.72 million barrels per day, an increase of 290,000 barrels per day; Kuwait also increased by 150,000 barrels per day, to 2.9 million barrels per day barrel/day. In addition, data show that crude oil production from Saudi Arabia, Iraq, Kuwait and the United Arab Emirates accounts for 70% of OPEC production. Their crude oil and condensate loading averaged 18.9 million barrels per day in April, an increase of 2 million barrels per day from March. Demand fell off a cliff in April, and the surge in supply led to rapid global restocking. It can be said that April was the worst time for the global crude oil market, but in May, the contradiction between supply and demand will ease. According to the OPEC+ production reduction agreement, starting from May 1, OPEC+ will jointly reduce production by 9.7 million barrels per day. Currently, based on agreement constraints and demands for passive production cuts, supply will tend to decrease at the margin.
In addition, from the demand side, countries are increasing oil reserves. Among them, India said that it has taken advantage of low oil prices to reserve 5.3 million tons of strategic reserve crude oil; Trump said that the United States is increasing its oil reserves. Fill strategic petroleum reserves. India’s crude oil demand shrank by 70% in April, and the current situation is unprecedented in the world. Zhong Meiyan reminded that it should be noted that although there is still no obvious turning point in overseas epidemic diagnosis data, the demand for resumption of work and economic restart is accelerating. The expectation of improved demand from the restart of overseas economies, especially the United States, India and other economies, has dominated the rebound of oil prices. .
“On the whole, oil prices are treated as a rebound, and the bottom reversal still needs to be further confirmed, especially in the context of the resumption of work against the backdrop of a large confirmed base, and the epidemic is likely to be more widespread. The possibility of spread. If there is a second peak, some countries will have to adopt blockade policies again, which will cause more damage to the economy than the previous time.” Zhong Meiyan believes that the expectation of marginal improvement in the international crude oil supply and demand relationship has made oil prices A quick rebound, but its sustainability remains to be seen. In addition, the monthly spread is improving, especially the deep premium pattern in near and far months may slow down, that is, the near month will rise more than the far month, driving the price difference to repair. For the domestic crude oil market after the holidays, there is a possibility of a higher opening, but overall caution is still needed.
The performance of agricultural products is divided
In terms of agricultural products sector, ICE raw sugar leads rose, while horse palm oil fell sharply.
The price of raw sugar first rose and then fell during the holidays, and the overall trend was relatively strong. Nanhua Futures analyst Bian Shuyang believes that the sharp rebound in sugar prices is mainly based on the following factors: First, crude oilStabilizing and rebounding, as European and American countries began to resume work and production one after another, and oil-producing countries began to implement production reduction plans in May, crude oil prices rebounded from the bottom, which led to a rebound in ethanol prices, which triggered an increase in raw sugar prices; secondly, the prices of raw sugar in European and American countries The resumption of work and production has also led to expectations for a rebound in sugar demand; third, a large number of raw sugar contracts have been delivered in May, reaching a record high. Most of the sugar delivered comes from Brazil, which has released more short-term pressure.
“Technically, raw sugar is under great pressure around 11 cents/pound. If sugar prices continue to rise in the short term, it may still depend on the performance of crude oil. During the holiday season , the domestic spot market also performed strongly, with spot prices generally rising by 150-200 yuan/ton. Therefore, Zheng sugar prices may open sharply higher after the holiday, but it will be more difficult to continue to rise in the future. As the tariff change period approaches, Sugar prices may also cause bigger waves.” Bian Shuyang said.
Palm oil continued to fall during the holidays. As of the close on the 5th, the July contract price had fallen below MYR 2,000/ton and closed at MYR 1,973/ton. In this regard, Shi Hengyu, chief vegetable oil analyst at Luzheng Futures Research Institute, believes that against the backdrop of relatively stable performance of crude oil and CBOT soybean oil, the negative fundamentals of palm oil itself are the main reason for the weakening prices. According to Bloomberg’s supply and demand data survey, the market expects that the total MPOB caliber Malay palm oil inventory (including crude oil and refined oil) will reach 1.89 million tons in April, which is the highest point of inventory in the last four months of this market year. The market expects this The interpretation is also negative than expected.
“In addition, survey data from the Southern Palm Oil Association SPPOMA showed that crude oil production in plantations in the southern Malay Peninsula in April increased by 12.74% compared with the same period last month. United Overseas Bank (UOB) ) is expected to increase crude oil production by 15% to 19% month-on-month, which also pricks the nerves of bulls.” Shi Hengyu said that although exports may show a slight increase, the substantial increase in output has made the market cautious about the impact of last year’s drought again. Fantasy evaporated. As the impact of the epidemic continues to play a global role, Southeast Asia’s exports to Europe, the United States, and India will only become weaker and weaker. At the same time, before crude oil prices rise significantly, Indonesian biodiesel production may actually have been greatly affected.
Shi Hengyu said that overall, the current fundamentals of palm oil are still weak, which will lead global oil prices to continue to find the bottom. They are still far from the lows in the middle of last year. , unilateral long exposure and traders need to be very careful when pricing.
At the same time, US cotton fell sharply during the holidays. Zhou Wenke, assistant general manager and manager of the R&D department of Dadi Futures, said that the decline in U.S. cotton is due to normal adjustments. Global demand has not yet normalized. In addition, there are differences between China and the United States regarding the epidemic. The market is worried that China may suspend purchases of U.S. cotton. . “However, I personally believe that the first phase of the agreement will most likely be implemented. As the global epidemic is brought under control, demand will gradually return to normal, and cotton prices will improve in the long term. After the holidays, the domestic market may open lower due to the impact of external factors. This is a good time. A good opportunity to buy low,” Zhou Wenke said.
U.S. stocks first declined and then rose
Throughout the May Day holiday During this period, U.S. stocks declined first and then rose. U.S. stocks rose for the second consecutive day on Tuesday, as the U.S. and Europe gradually lifted their blockades and restarted their economies, boosting market sentiment. They plunged sharply in late trading due to the impact of Fed Vice Chairman Clarida’s speech. As of the close, the Dow rose 0.56% to 23883.09 points; the Nasdaq rose 1.13% to 8809.12 points; the S&P 500 rose 0.90% to 2868.44 points.
“As far as U.S. stocks are concerned, the impact of U.S. President Trump’s announcement that he would take retaliatory actions against the epidemic, unsatisfactory U.S. economic data, and the Federal Reserve Chairman’s statement that the economy Affected by factors such as the recovery will be very tortuous, market risk aversion increased, which led to the decline of U.S. stocks between April 30 and May 1. On May 4, driven by the rise in technology stocks and energy prices, U.S. stocks opened lower and moved higher. , the Nasdaq index was among the top gainers,” said Chen Chang, a stock index futures analyst at Yide Futures.
In terms of precious metals, the overall trend of oscillation and weakening during the holidays has been shown. “The current trend of gold and silver is relatively tangled, and the overall trend is mainly oscillation and weakening. The main reason is that funds have taken profits after the price did not break through the pressure level. The current net long position of gold funds is still at a relatively high level, and the recurrence of the epidemic has delayed inflation expectations. It has not been able to rise for a long time. In the absence of inflation, it is difficult for precious metals to have a big opportunity to rise. However, due to the economic downturn and extremely loose global monetary policy, the downward space is also limited. Therefore, we believe that the future trend of gold and silver will still be dominated by oscillations. , the upper and lower space is limited, and consolidation is to prepare for the next rise. In the future, it is appropriate to adopt the strategy of buying on sharp declines and exiting at high prices.” Wang Jun, futures analyst at Minmetals Economics, told a reporter from Futures Daily.
Domestically, Wang Jun believes that because U.S. President Trump hinted that he would restart trade disputes, the offshore RMB exchange rate depreciated significantly during the holidays, which was hedged to a certain extent. Gold and silver have fallen in the past few trading days, so it is expected that after the domestic market opens, it will be basically the same as before the holiday. The future trend will still depend on the joint effect of external market and exchange rate.
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