China'S Demand Supports "Crazy Cotton" &Nbsp; Supply Pressure Is High.

Cotton futures on the Zhengzhou mercantile exchange continued to hit a new high in October 26th, with the main 1105 contract hitting 27980 yuan per ton.

Although the recent rise in cotton prices is crazy enough, market participants believe that the rise of Zheng cotton is not over yet.

Market participants analyzed that ICE's strong cotton prices benefited from China's continued strong demand support.

Last week, the US Department of agriculture statistics.

Liu Qing, an analyst at new lake futures, pointed out that the amount of cotton exported to the United States was around 3 million 378 thousand tons, of which China's imports accounted for about 1/3, about 1 million 100 thousand tons. As of October 22nd, India approved a total export of 873 thousand tons, which is close to its 935 thousand tons export target. It can be imported from around 400 thousand tons or so from China's imports.

In the interview with reporters, Shanghai mid-term analyst said in an interview with reporters: "as a result of the good textile business last year, textile enterprises have generally expanded their production capacity this year, and the increase is basically over 10%, and there is a strong demand for raw cotton."

He also pointed out that as long as the domestic cotton planting policy does not change significantly, China's cotton demand will become more and more dependent on imports.

New supply pressure

In addition, the rise in cotton prices also depends on the support for cotton production cut this year.

According to the latest forecast of the US Department of agriculture in October, the global supply and demand gap of 890 thousand tons in 2010-2011, this gap directly led to the end of this year's global inventory and inventory consumption ratio continued to decline. This year's inventory consumption ratio will drop to 37%, the lowest point since 1993-1994. This year's supply and demand environment can set the tone of the cotton bull market this year.

The US Department of Agriculture estimates that China's cotton output is about 6 million 858 thousand tons this year, and the supply gap is 4 million 28 thousand tons.

Liu Qing said: "according to the information currently available, China's cotton production this year is more obvious than that of the previous year due to weather reasons. From the understanding of the market parties, the output will be below 6 million tons. It is generally believed that more imports will be needed to make up about 5 million 500 thousand tons.

Now the weather is getting cool, and the low temperature is harmful to cotton growth. There is still uncertainty in cotton output this year.

Coupled with the current situation of cotton farmers reluctant to sell, the acquisition process is slow and the market supply pressure is large.

Liu Qing predicted that before the large number of domestic and foreign cotton was listed, the market supply tight pattern was difficult to mitigate under the premise of stable demand, and cotton futures prices are expected to continue to rise.

High price shocks

At present, the price of cotton futures both at home and abroad has reached a record high, and the technical pressure level does not exist.

However, analysts warn investors that high prices mean high risk. Because of the rapid rise in cotton prices in recent years, or the technical adjustment, the fluctuation will intensify.

"Yesterday, Zheng cotton fell back after high, and many long positions were clear."

Liu Qing analyzed, "cotton price is facing short-term adjustment.

But under the support of fundamentals, the short-term adjustment will not be very large, and the market outlook is expected to strengthen.

Market participants suggested that investors should have a long way of thinking about the operation of cotton futures before the large number of domestic cotton goes on the market, and when there is no significant drop in the purchase price of cotton seeds or the purchase price of seed cotton, but it is not appropriate to continue to catch up in the short term.

See thunder, said: "now the risk of cotton prices gradually accumulate, it is no longer appropriate to do more, but the time is not yet available. The future cotton prices will be at a high and volatile pattern, long-term operation in the range of 22000 yuan to 28000 yuan per ton."