The Recent Flood Disaster Affected &Nbsp, &Nbsp And Cotton Production In China.

I. market description

In August, yarn The price continued to drop by around 1000 yuan per ton. At the end of August, it remained near 26000 yuan / ton, and there was a trend of maintaining stability. Cotton spot pressure, overall showed a slow down trend, 328 cotton quotes down 200 yuan, throwing prices and spot quotes are basically flat. With the yarn consumption of textile enterprises, the purchasing of cotton by textile enterprises is promoted, thus supporting the spot price and throwing stock. After heavy rain in the Yangtze River Basin, the cotton production in the the Yellow River River Basin in August affected the cotton production again. Cotton is in the critical period of production. It is expected that the production will be greatly reduced, so that Zheng cotton, which is already showing signs of overbuying, will continue to shake up and collate. Under the influence of new cotton's gradual listing, the 01 main force is expected to have a high price in the purchase of new cotton. It is expected that the purchase price will soon break through 17000 yuan / ton, while the 01 contract has just broken through the 17000 front line pressure, and the market outlook can be expected to rise.

In August, the trend of the US cotton continued to increase in the early stage. After the announcement of the supply and demand forecast by the US Department of agriculture, the inventory consumption was lower than that of the previous period, while the new cotton export contract continued to improve, further boosting the US cotton growth. Breaking through the 85 cents integer mark, the market outlook is expected to challenge the 90 cents front-line pressure. However, from the historical data, the US cotton contract in December broke through 85 cents only two times, and the duration did not exceed two months, so it is expected that the US cotton will go down in the later stage and maintain the overall rally. December contract August turnover interval maintained between 78.16 cents to 87.25 cents, traded more than 2 hands, 144 thousand positions.

Two, market analysis

(I) international market

1. US Department of agriculture report shows Inventory consumption Lower than maintain

The US Department of Agriculture released the latest 2010/11 cotton consumption forecast for the year, and estimated cotton consumption to be about 120 million 900 thousand bales. Although this has increased by 2.7% over the year of 2009/10, it is still less than the consumption of the past three years, with a total reduction of about 123 million bales. Judging from recent economic indicators, the global economy will continue to recover this year.

The four largest cotton producers in the world - China, India, Pakistan and Turkey - expect total cotton consumption to account for 73% of global consumption in 2010/11, which is close to last year, higher than 71% in 2006-2008 years. In 2010/11, cotton consumption in China and India is expected to account for 58% of the world's total consumption.

At the same time, Pakistan and Turkey Consumption It accounts for about 15% of global consumption.

Global cotton consumption increased by 2.7% over the same period of 2010/11. China, the world's largest textile producer, expects cotton consumption to reach 50 million packs in, up 3% from the same period last year. In India, the amount of cotton used in textile mills increased by 4% to 20 million 400 thousand bales in 2010/11, while Turkey expects cotton consumption to increase 3% to 4 million 600 thousand per cent over the same period. In Pakistan, cotton consumption in 2010/11 was 11 million 500 thousand packs, unchanged from last year.

Global cotton inventories in 2010/11 are expected to reach 45 million 600 thousand packages, down 4% from the same period last year, the lowest level in 13 years. At the same time, the expected inventory and consumption ratio is 38%, a decrease of 2% compared with 2009/10, the lowest level since 1994/95. In the long run, global cotton prices will continue to rise as a result of the expected decline in global end inventory and inventory and consumption ratios.

2.CFTC speculative fund net long positions rose this month.

From the fund position held by the US Commodity Futures Trading Commission (CFTC), the net position of the fund has dropped sharply with the US cotton high ranking. By the week August 24th, the net held 47599 positions, and the fund's net long lead rate was 22.36%, up 2.04% from last week. From the position report, we can see that net long positions continue to expand. This week, the cotton index rose sharply compared with last week. The market outlook or challenge 90 cents first line support.

(two) domestic market

1. there is a serious phenomenon of speculation on the spot, and the intensity of policy regulation is increasing.

In August 10th, dumping and storage were officially launched at a rate of 15 thousand tons per day. After 40 days, the supply of new cotton can basically be achieved. As of 27 days, accumulative total of 2 billion 2 million 640 thousand tons of dumping and storage, the average price of business folded 328 grade lint 18115 yuan / ton, CIndex328 index 18025, throwing the auction is relatively rational, close to the spot market. The high price before dumping price can reflect the relative urgency of resource demand for textile enterprises in the short term, and reasonable expectations for new cotton listed prices. Therefore, with the listing of new cotton, there is a reasonable expectation that the price will be close to the new cotton market.

Therefore, the reasonable expectation of the new cotton listed price will become the key to decide the cotton price trend in the future. Owing to the low temperature in April of this year, cotton sowing was generally postponed in the whole country, and the development of new cotton was later than in previous years. In May, the weather improved and was conducive to the growth and development of cotton. After entering late June, the cotton seedlings began to show differences. The weather in the Yellow River River Basin was fine and the transformation of seedlings was accelerated. The Yangtze River valley cotton belt had ushered in heavy rain since July. The area affected by waterlogging was very large, and the cotton increased late. The cotton growing area in the Yellow River River Basin suffered flooding again after entering August. Overall, the country is expected to cut production by 3% to 3.5%. The listing time of new cotton is generally postponed for one to two weeks.

As cotton prices continued to rise in the previous year, the latter was more than 4 yuan / Jin, and the price of domestic 18.83,0.28,1.51% was also higher than in recent years, especially grain prices rose sharply, and showed a trend of continuous improvement. According to the grain and cotton price comparison, cotton prices will be much higher this year than before. Therefore, cotton farmers will have a high price this year. New cotton has been sporadically listed in some parts of Hubei, and the quality of new cotton is relatively low, but the listing price is between 3.8 and 4 yuan.

By the end of July 2010, the total domestic cotton business inventory was 1 million 200 thousand tons, and the cotton industrial inventory was 1 million 32 thousand and 400 tons. The total import volume of cotton is 2 million 264 thousand tons this year. The import volume from 1 to July is 1 million 713 thousand tons. The remaining available quotas are about 1 million 500 thousand tons, plus 600 thousand tons of dumping and storage. It is estimated that the total supply of domestic resources in the 8 and 9 months is expected to be about 3 million 200 thousand tons. At the end of August and the beginning of September, the monthly consumption of domestic textiles was deducted. It was estimated that there would still be 2 million 400 thousand tons of market supply in September.

With the increase of purchasing quantity of cotton yarn in the lower reaches, cotton yarn inventory of most textile enterprises has been reduced, and the purchase intensity has been increased, which has become an important factor supporting the spot price of cotton maintaining high. Meanwhile, from the recent rebound of the reserve price, we can see that the buying and selling trend of the spot market is tight, and it supports the Zheng cotton's high maintenance. Data show that since the beginning of August, the price of 32 cotton knitted yarns has dropped by 1000 yuan / ton, far more than cotton, but the prices are generally stable in the near future, and there is little room for further decline in the latter part.

Therefore, even if the spot price is in line with the new cotton, it is still difficult to fall back. The cotton price will probably remain at a high level. If the purchase price of the new cotton seed cotton reaches 4 yuan / Jin, the purchase price of the new cotton will be around 17000 yuan / ton, according to the current average price of domestic cottonseed price of 1.48 yuan / Jin. At present, the price of Zheng cotton 1101 contract is not high.

U.S. cotton rose, breaking 85 cents pressure, the market outlook is expected to continue to challenge 90 cents high. However, from the historical data, the US cotton contract in December only appeared two times above 85 cents, and lasted for a short time. In addition, it continued to be close to overbought in the near future. It is difficult to maintain 85 cents above the market. At the same time, Zheng cotton and the rise and fall has not declined, the market outlook is expected to continue to rise, challenging the historical high pressure of 17660.

From the chart below, we can see that with the expected tight supply of cotton in the new year of the world, the quotation of imported cotton rapidly increased in August after a rapid decline. While domestic spot prices continued to fall slightly, but the overall maintenance of 18000 yuan / ton, the pullback amplitude is limited, the difference between inside and outside cotton price is reduced again. It is also one of the factors that support Zheng cotton's high maintenance.

Three, the market will be judged {page_break}

The recent ICE cotton December contract, which was initially affected by the new cotton sales data, rebounded sharply. In addition, the monthly demand and supply forecast of the US cotton market once again raised global consumption. The inventory consumption was lower than the low maintenance position, and the US cotton which had already overbought signs was pushed up again, and the US cotton contract in December broke through 85 cents line. Compared with the history, the current price is obviously higher, but there is still a possibility of continuing to challenge the pressure of 90 cents.

The US Department of agriculture monthly report on global cotton supply and demand showed that 2010/11's global cotton inventories decreased by 4% over the same period last year, the lowest level in 13 years. At the same time, the expected inventory consumption ratio is 38%, a decrease of 2% compared with 2009/10, the lowest level since 1994/95. The expected decline in the global end inventory and inventory and consumption ratio is likely to further boost global cotton prices.

With the increase of purchasing quantity of cotton yarn in the downstream weaving, most cotton mills have reduced their cotton yarn stock, which has increased the purchasing power of cotton and become an important factor to maintain the spot price of cotton. At the same time, from the recent rebound of the reserve price, we can see that the trend of buying and selling in the spot market is tight, supporting Zheng cotton to maintain its high position. Data show that since the beginning of August, the price of 32 cotton knitted yarns has dropped by 1000 yuan / ton, or far more than cotton, but the price has generally stabilized in recent years. There is little room for further decline in the latter period, and the pressure on cotton prices has also weakened.

In August, the flood and waterlogging disaster in the the Yellow River River Basin increased and the pressure of the callback was offset. Seed cotton purchase price is expected to be high again, or will soon break through 4 yuan / Jin, according to the current domestic cotton seed mainstream price 1.48 yuan / Jin calculation, acquisition cost is expected to be around 17000 yuan / ton, with the new cotton market is approaching, cost support factors will become stronger and stronger, so the market is hard to break down 17000, if the bottom is broken, then the middle and long term line to maintain a long bargain.

US cotton technology to maintain the upward trend, the market outlook is expected to challenge 90 cents first line pressure; domestic recent floods, the cotton production is reduced, seed cotton listed price is expected to exceed 4 yuan / Jin, the purchase price of 17000 yuan / ton, with the new cotton gradually listed, the support for Zheng cotton will continue to increase; after the overbought pressure of early accumulation, after a short release, Zheng cotton 01 contract in the basic support, it is expected that the cotton support interval will gradually move upward, the key support 17000, 16500; keep the long term thinking.