Reinhard: The Market Will Expand At The Present Level.
cotton
At the beginning of this week, the market was almost 86 cents (10 December), and after the record high, cotton entered the consolidation stage.
In December 10, the price difference continued to remain at 1 cents -2 cents / 03 in -11.
The open position has increased by about 60000 contracts, now slightly higher than 210000 hands, returning to the level of September 2008.
Aftermarket
Outlook - the recent consolidation of the market seems to create a sustained bullish pattern (bull market).
The short term prospects for other commodities are mainly neutral.
However, the increase in open positions shows that speculators / funds still like this technical aspect.
The main trend continues to be good, as long as the price does not break 77.80 cents / pound (December contract), but the continuous important top appears to be about 85 cents / pound.
From a fundamental perspective, India announced the release of cotton exports, which could lead to more trade in the coming weeks to hedge the seller.
However, the news seems to have been expected by the market, because we see that prices have almost no response.
Taking into account the constructive nature of the December contract curve, we tend to believe that the market will be consolidated at the present level.
The United States - the recent ICE cotton rebound, and gave
U.S.A
Growers offer an opportunity to pre sell part of 2010/11 cotton.
6 million packages of upland cotton have been commissioned for export, including 450000 packets this week.
According to the latest report of the US Department of agriculture, cotton growth has dropped slightly.
Good to excellent cotton decreased by 3%.
In the next few weeks, the output and quality of cotton in the United States need to be carefully observed, and the number of market participants is increasing.
India - India is the second largest exporter of cotton in the world's cotton map.
The India government has announced that cotton exports will be liberalized from October 1, 2010.
At the same time, it is expected to announce the abolition of the existing export tax of 2500 rupiah / ton.
No formal notice has yet been received.
The factory price of the cotton mill rose in a very short time due to the strong demand from the cotton merchants and the local textile mills.
Now, many market participants seem to be fighting for 2009/10's early delivery of cotton.
The cotton quotations for 2010/11 years after November are still limited.
The weather in Pakistan is slightly changing in some parts of the country.
At the same time, the recent policy of India on cotton exports has led to a marked decline in domestic prices in Pakistan.
The recent floods are rare, destroying most of the crop this year.
According to industry sources, 150-200 cotton bags were washed away, which is about 15% of the 14 million pack (170 kilograms) produced earlier, ICAC's recent forecast.
The consumption volume is about 15 million bales (170 kilograms), and this year's imports should be 200-250 bales.
China early this week, the Zhengzhou mercantile exchange held a 11 year contract in January, reaching the highest point in May, but then stopped at the key resistance level of 17100 yuan / ton.
After a strong rebound, the price seems to need a necessary pullback.
The bullish faction believes that 274650 hands in the empty market seem to support their view.
Yesterday, the CNCE cotton reserve auction day volume reduced by about 13000 tons, compared to last week's auction at the beginning of the peak turnover of more than 15000 tons.
At the same time, the starting price fell 7.5% from the highest price, slightly lower than 17000 yuan / ton.
One reason may be that domestic trading companies are cleaning up inventories, so they are putting pressure on the overall price level.
Today, however, the average price rebounds to 17 '502 yuan.
Demand for foreign upland cotton has been reduced to a minimum, because the price is now higher than domestic cotton prices.
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