Cotton Prices Remain High &Nbsp; Shock "Great Changes" Cause Storm

Fundamental information

1. USDA downgrades 2010/11 end inventory.

Us USDA releases global cotton supply and demand monthly report, due to expansion of production demand gap, 2010/11's global beginning and end.

2, the impact of throwing reserve policy

In August 10th, the central storage cotton began to open 600 thousand tons of state reserve cotton to the market and openly bid through the national cotton trading market.

If sold at a rate of 15 thousand tons per day, the sale is expected to last for about two months.

At present, the price of the auction is reduced to 328 level, and the average paction price is maintained in 17800-18500 of the regions. The price falls little, and the price of throwing and storing is maintained at a high level.

3. New cotton

Cotton is generally late maturing this year. If farmers do not want to sell, new cotton will be listed for more than 10 days.

At present, there are sporadic new cotton acquisitions in some parts of China.

At present, the acquisition of Xinjiang's Hami region is not hierarchical. The seed cotton purchase price of more than 40 is 8.3-8.5 yuan / kg, and cottonseed is 2.2 yuan / kg.

The purchase of grade 2 seed cotton padded clothes in Turpan area is about 39, and the purchase price is 8.3 yuan / kg.

There are also sporadic acquisitions in some parts of Hubei. The purchase price of seed cotton is between 7.8 yuan and 8.2 yuan per kilogram. Considering the processing cost and profit, the price of lint three is estimated to be between 17500 yuan and 18000 yuan.

At present, higher seed cotton prices provide strong support for the price of spot lint, but the high purchase price of new cotton will make the market in the early stage of takeover possible.

4.

The domestic spot market paction is still cold and cheerless. With the advent of the new cotton concentrated listing, cotton enterprises are actively shipping, and the sale price of lint has continued to decline, and the decline has increased.

Evaluation outlook

The USDA monthly report on global cotton supply and demand shows that the global and initial stocks in 2010/11 have been lowered due to the expansion of production demand gap.

Many provinces in southern China suffered floods, and the industry predicted that China's cotton production would be reduced by 5%-10%. 30% of cotton fields in Pakistan were destroyed by floods, which would lead to a net importing country from cotton exporting countries.

Although the state put in 600 thousand tons of cotton reserves, but because of the higher paction price, the pressure on the price is limited.

New cotton is coming to the market to suppress the price, but under the support of many factors, Zheng cotton keeps the medium term upward trend. It is expected to further test the 18500 pass, and the 18500 shocks will intensify.

It is estimated that zhengmian 1105 will run in the 17000-18800 interval in September.

Trend of Technology

The picture shows Zheng cotton 1105 contract chart.

Technically, Zheng Mian 1105 contracts to accelerate after the breakthrough of the 17500 platform, short-term pressure to see the 18500 integer pass, is expected to face shocks at this juncture, supporting below 5 weeks moving average; breakthrough will further test the 18800 line.

Overall, it is expected to maintain a high level of operation.

Operation strategy

Short term strategy: Cotton continued to uplink in August, the current average is showing a large number of arrangements, there is still upward potential in the short term.

1105 the contract is mainly based on long thinking. Every drop can intervene in many contracts. A sharp increase will result in profit reduction or liquidation. The upward trend on 18500 must be more cautious.

Relying on the strategy of relying on the 5 day moving average, we should leave the market temporarily.

Pay attention to rhythm control and position control, and make good fund management.

(unless there are major bad news, bargain hunting is mostly the main strategy at this stage.

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Midline strategy: in view of the strong overall price of zhengmian, investors are waiting patiently for the opportunity to buy positions in the callback.

Relying on the 5 week moving average (17600-17800 front-line), the central line must be set up (more than 35%), the stop loss position (closing price falls below 17450); the first line of the central line should be seen to the 18500 line; if it breaks through 18800 lines, it will be held to second target 18500.

Enterprise Hedging: cotton textile enterprises can gradually set up the central line more single (fall down to below 17800) in the next four months.

At present, cotton production enterprises can gradually establish an empty list above 18500, and establish a hedging position appropriately, so as to avoid the dramatic fluctuation of spot prices, which will have an impact on the normal production and operation of enterprises, and avoid unnecessary losses arising therefrom.

risk-prevention

1, if the price of dumping and storage continues to fall, it will suppress market sentiment and suppress cotton prices.

2, pay attention to the acquisition and listing of new cotton.

3, if there is a big negative data on the macro level, it will probably suppress cotton prices.