The International Economy Is Still Fragile &Nbsp; Cotton Prices Are Hard To Sustain (2).

3.

According to statistics of cotton enterprises in different provinces and sub scales, the total cotton business inventory in the end of June 2010 was 1 million 900 thousand tons (including cotton and cotton in circulation, excluding national cotton reserves).

The plan for dumping and storing 600 thousand tons of cotton quota has been approved and ready to start.

According to the monthly consumption of 800 thousand tons of cotton, as of the new flower listing, the total inventory of textile enterprises is 2 million 500 thousand tons, which can fully support the new flower listing, while the 7-9 month is the traditional textile off-season, the demand for cotton will be reduced, and the cotton gap will be satisfactorily resolved.

In addition, in view of the possible delay in the listing of new cotton this year, the state has made good preparations for importing, throwing and storing. At the same time, the state will adopt a series of supporting policies to ensure the market supply of cotton.

4, cotton planting area increased, cotton yield or improvement.

The US Department of agriculture's report on crop acreage released at the end of June shows that the 2010/11 cotton planting area is expected to increase by 19% in the year of 2010/11. Currently, due to favorable weather conditions, the US cotton growth is better (up to 48% in June 27th, compared with 29% in the same period last year).

The official statistics in India also performed well, and the new sown area increased by nearly 20% in June 24th as compared with the previous year in 2010/11.

2010/11 cotton production in West Africa is expected to grow by 15-20%. In addition, the planting area of Brazil cotton has been relatively stable, while the output per unit is steadily increasing. Cotton production in Brazil is expected to increase to 140-150 tons in 2010/11.

Although China's cotton planting area is stable at last year's level, its total output is expected to increase by 11%. Meanwhile, the increase of cotton planting area in India, the United States and West Africa has brought more resources to domestic cotton supply.

5.

Cotton, polyester staple fiber and viscose staple are three main raw materials for cotton spinning industry.

There is competition among the three, mutual substitution and mutual support.

The high price of cotton will increase the use of polyester staple and viscose staple fiber.

High price of chemical fiber will block the drop of cotton space.

At present, the price of the 328 grade real estate cotton market is around 18300-18500 yuan / ton, when the polyester staple fiber is only 9500 yuan, the price difference between them is about 9000 yuan, while the price of 1.5D*38mm viscose staple fiber is near 18500 yuan, which is the same as cotton price.

Generally speaking, cotton is 2000-3000 yuan higher than that of cotton, which is normal. It is normal for cotton to stick short and up about 4000 yuan / ton. However, the price of cotton is high, not only far from polyester staple, but also nearly 0 with short stick, which will push cotton prices down and stabilize the price gap between the three.

Looking at the trend of viscose, cotton and polyester in recent years, we found that this phenomenon happened only in December 2008 and April of 2009. At that time, cotton and viscose prices were almost the same, and the gap between polyester and cotton was also around 4000 yuan. Why? Then, it was the most difficult time for financial crisis. Viscose, polyester and short in order to seize the flagging textile market, they had to sell their products at a price, and cotton prices were relatively high at that time, which is the result of State purchasing and storage.

Now, the turmoil of financial crisis is subsiding. Although the market of viscose staple and polyester staple fiber is not outstanding, many textile enterprises have joined the ranks of producing all cotton yarns under the drive of high profits. This also causes the demand for polyester staple fiber and viscose staple fiber to decrease. However, with the dropping of storage and the decline of all cotton yarn prices, it is unlikely that cotton will continue to be high.

6, cotton yarn rising no longer, began to slow down.

Starting from July, the role of off-season shows that there is a glimmer of decline in the whole cotton yarn market. Cotton textile enterprises are beginning to cool down, and some small factories have started preferential measures. The paction price is 300-500 yuan / ton more than the actual offer.

In addition, the purchasing enthusiasm of the whole cotton yarn market has begun to slump. The market generally reflects that the paction is insufficient, and the stock is starting to increase.

The high price of all cotton yarn has also led many enterprises to choose alternatives such as TR yarn, pure polyester yarn, polyester cotton yarn and so on.

The rise of cotton yarn will no longer drag the cotton spot market upwards. Besides, the demand for cotton yarn will not be enough. It will also reduce cotton consumption and further restrict the uplink of Zheng cotton futures.

In addition,

7. Post market judgement and operation

Under the strong fundamentals support, Zheng cotton futures has reached the high point since 2003. However, with the strengthening of policy regulation and the positive expectation of cotton production or improvement, in addition, with the slowdown of the international economic growth and the effect of the off-season effect, the lack of action on Zheng cotton futures is not likely to continue to rise.

I believe that in the short term, CF1101 will pay attention to the support level of 16500 yuan / ton, and more than 16800 can consider short selling.