Cotton Stocks Fell Sharply

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Review:

Cotton prices continue to rise since the end of September as cotton production is expected to decrease next year, and this week's acceleration is accelerating.

The cotton futures contract of the Zhengzhou Mercantile Exchange hit a new high in the year.

Driven by rising cotton prices, several "cotton stocks" also rose simultaneously.

Since September, the cotton market is expected to reduce cotton production in 2009~2010. Cotton prices have risen by more than 10% since late September and early November.

At the end of last week, China Cotton Association released the estimated data that China's cotton production will decline 550 thousand tons to 6 million 700 thousand tons in 2009~2010. Meanwhile, the United States Department of Agriculture reported in October that in October, the global cotton planting area was 30 million 510 thousand hectares, down 0.8% from the same period last year.

This has accelerated the acceleration of cotton prices.

Cotton stocks rose synchronously

The rise of cotton prices will directly enhance the profitability of the relevant listed companies. Currently, there are mainly three listed companies in the cotton business. The new agriculture development and the new race share are mainly cotton planting, and the seed industry of Dunhuang also has part of the cotton business.

As cotton prices have risen continuously since the end of September, the three stocks have also seen a simultaneous rise, of which the largest increase in new agricultural development has risen by more than 70% since the end of September, and the total increase of new stock has reached 40%, and the cumulative growth of Dunhuang's seed industry has also exceeded 50%.

The rise in cotton prices has indeed contributed to the growth of related "cotton stocks".

Among them, the performance of new agriculture development is better, earnings per share increased continuously in the first three quarters of this year, and the business income increased 93% in the third quarter compared with the same period last year.

The three quarterly report of new Sai shares shows earnings per share of 0.0159 yuan, a doubling over the first quarter.

Too big to catch up.

However, in the short term, after the rally since the end of September, the situation of fear of high prices in the cotton market has begun to show.

Analysts believe that the short-term increase in cotton stocks has been very obvious, investors should not catch up. The rise in cotton prices is a long-term good for listed companies. It is advisable to intervene again when the market returns.