Review: Cotton Price Peak Or Re Docking

Recently, ICE

Old annual inventory

The cotton summit in September 10th and the cotton association meeting in September 13th all revealed the same content. The market generally agreed that the cotton planting area was basically the same as last year, and the output may be slightly lower than that of the previous year, due to climate and natural disasters.

As we all know, cotton production in China in normal years is about 7 million 500 thousand tons. Last year, the output sharply reduced to 6 million 400 thousand tons, which caused market anxiety. In order to restrain the rise in cotton prices, the country threw three tons of cotton in 2009 and accumulated 2 million 600 thousand tons of cotton. In 2010, it also dropped 600 thousand tons across the year (up to 80% in September 19th), accumulating 3 million 200 thousand tons, and the reserve cotton stocks were over consumed.

Even if output is flat this year, cotton imports still need to be imported in large quantities.

New year's global cotton

At present, the supply of cotton in India, Pakistan and China is worrying.

India is affected by precipitation, and the new cotton market has been postponed, leading to a rise in domestic cotton prices.

The cotton market in Pakistan continues to warm up and the average price of lint has risen by 7% in a week.

After India announced the cancellation of Pakistan's export contract of about 34 thousand tons, some analysts believe that India's restrictions on cotton exports will tend to be stricter this year.

According to the monthly report of the US Department of agriculture's latest global cotton supply and demand forecast, the increase in Australia and the US output is partly offset by the reduction in China, Pakistan and Tanzania. Consumption in India and the US has increased. The global end inventory has not been adjusted, and the inventory consumption is expected to be 38%, the smallest since 1994/1995.

The tight global cotton supply in the new year provides strong support for the US cotton prices to remain high in the long run.

The US cotton export contract is in good condition.

High cotton prices have not stopped the signing of the US cotton export.

USDA released the weekly data of the US cotton export show that as of September 9th, when the week signed 129 thousand tons this year, a record high of the year, the new year also reached 58 thousand and 100 tons. The high cotton price has not stopped the pace of signing the US cotton export, but has accelerated.

In the more than 40 days of this year, the amount of contract signed by US cotton is nearly 1 million 600 thousand tons, which is nearly half of the 3 million 266 thousand tons in the USDA year.

At the same time, China, the world's largest cotton importing market, has only about 500 thousand tons of US cotton contract volume this year, and there will be a large number of imports in the latter part.

External fund to do more momentum

Recent market fundamentals provide opportunities for speculators to do more.

First, the US cotton and global inventory consumption ratios are the lowest level in 15 years. Secondly, the registered inventory is basically the lowest level in history. Therefore, speculators are doing their best. Cotton prices are soaring and the price is 100 cents / pound.

According to the latest CFTC data, the net bull interest rate of the ICE cotton futures fund in September 7th was 24.25%, showing an increasing trend for seventh consecutive weeks.

Under the promotion of good fundamentals, there will be a continuous increase in the net rate of speculation in the cotton futures market. The future price reduction of cotton will also be very limited. The market will have a 100 cent confidence in the price of ICE cotton, and it will not be impossible to break through a record of 117.2 cents in 1995.

The standard price of throwing and storing up is 20000 yuan / ton.

In the near future, the main suppliers are concentrated in the dumping market.

In September 19th, the weighted average paction price of the cotton auction was 20750 yuan / ton, and the average price of the 328 class paction was 21273 yuan / ton, up nearly 1000 yuan from the previous day.

As of September 19th, the total volume of the total turnover was 481040 tons, 80% of the total planned volume.

According to the current progress, we can finish 600 thousand tons of dumping and storage plan by the end of September. It will be a big test for the market if the stock can be listed in large quantities.

After a large number of dumping, how much reserves can the country have to allocate? According to the normal reserve requirements, cotton should maintain normal reserves for about a month, roughly 900 thousand tons, and after the 600 thousand ton dump, the state reserve cotton will probably remain at the level of 600 thousand to 700 thousand tons. If cotton prices continue to rise, they will face no reserves.

Downstream raw materials inventory decline, product sales are still hot.

With the consumption of raw materials, industrial stocks in downstream textile enterprises have further declined, and purchase intention has been enhanced.

The "cotton industry inventory report" released recently by the national cotton market monitoring system showed that in the early September, the average number of cotton stocks used by enterprises surveyed was about 36.7 days, which had declined for 4 consecutive months. The textile enterprises preparing raw materials accounted for 70% of the total survey, which was 13 percentage points higher than that in early August.

With the increase in the price of downstream mills, the downstream conduction effect has emerged.

According to the downstream textile enterprises, the price of cotton yarn has risen sharply in recent years, and sales are still hot. Most purchasers take full cash and pick up the goods, even to the delivery. The peak season for sales is expected to last until December.

Domestic cotton prices are high.

At present, some cotton enterprises have begun to buy piecemeal, although the grade is not high and the water is too high, but the purchase price has risen to over 4.2 yuan, and the price in some areas has been collected to 4.5 yuan, and the phenomenon of robbing flowers is very common.

The demand for newly processed lint is good. Cotton enterprises are sold with processing, and the market is active.

The buyer thinks that the current cotton price is a reflection of the normal supply and demand relationship, and a large number of cotton factories from downstream will purchase cotton from the spot market. The high cotton price digestion capacity will not be reduced, which will be an effective support for the upcoming cotton purchase. The high purchase price will be inevitable, and it is expected to maintain a high opening pattern. This will help increase the income of cotton farmers and stabilize the cotton planting area next year.

Policy factor analysis

On September 15th, the national development and Reform Commission said at the joint meeting of the national cotton macro-control conference that it is not possible to exclude the possibility of extending the quota for the import of cotton quotas this year and Issuing the quota in advance next year.

This has given a stronger impetus to the already popular cotton market, and the national reserve cotton is likely to remain at the level of 600 thousand to 700 thousand tons after the 600 thousand ton sale. In order to increase the ability of regulation and control in the later stage, once the storage is taken, the domestic market is just as increasing some new demand, and it is also facing the dilemma of dilemma.

Sliding duty is more control over the quality of imported cotton and less impact on cotton prices.

The recent policy should pay attention to the national cotton working teleconference held jointly by the NDRC in September 27th.

To sum up, based on the strong support of fundamentals, cotton prices have taken a new step.

Under the premise of China's cotton production worrying, increasing consumption and unprecedented consumption of invisible stocks, the foreign cotton market is strongly optimistic about China's demand, and the international cotton price is expected to touch the high position of 1995.