Domestic Market Policies Regulate &Nbsp; Cotton'S Center Of Gravity Moves Downward.

As a result of the increase in the number of new cotton listed on the fundamentals, the new cotton circulation is accelerating in the market after high volatility, and the supply situation in the spot market is still tight. However, because of the possible decline in cotton prices, the mindset of both sides of supply and demand has changed, and the acquisition and lint spot market are both loose.

For the operation of the end of November and December, there are many measures to stabilize prices and combat speculation in agricultural products on the macro level. Administrative measures will not be a long-term behavior and will not have a fundamental impact on the fundamentals of the market, but will affect the critical time points of cotton prices. It is suggested that policies should be avoided in terms of operational risk, taking the wait-and-see and short-term operation as the main factors, and the changes in the basis of changes in the warranty and the price difference between Zhengzhou cotton and the electronic matching market, which can be operated in the 25000-28000 interval.

If Zheng cotton did not effectively stabilize in the 26000 front line,

Two. Review and Prospect of domestic and foreign cotton spot market

The picture shows the domestic 328 class cotton Cotlook A folding port delivery price chart.

In November, domestic cotton spot to downstream circulation speed up, seed cotton picking end, picking progress nearly 90%, Henan, Hebei, Xinjiang, Anhui picking progress faster, and Hubei, Jiangsu, Hunan picking progress slightly lower than the national average.

Nearly 7 acquisitions, and domestic cotton processing and sales progress has also been significantly accelerated.

As the volume of pactions in Zhengzhou cotton market has increased significantly since the beginning of this year, the number and quality of participating enterprises and participating pactions have increased significantly and the quality of Zhengzhou cotton market has been more and more able to play its role in leading the market and finding prices.

Zheng cotton's sharp rise and fall in the short term made its base deviation from the spot change from positive to negative.

At present, futures prices are lower than spot prices, causing psychological pressure on the spot market.

The mentality of buyers and sellers has changed.

A large cotton textile enterprise in Shandong increased its purchase price of lint for 7 times in late October to early November, and the total price increase reached 6300 yuan, but cotton processing enterprises still reluctant to sell.

From the beginning of the fall of Zheng cotton prices in November, the company lowered its purchase price of lint for 6 times in a row, with a cumulative reduction of more than 3000 yuan. Cotton enterprises are worried that cotton prices will continue to slide and cotton sales will be stronger than before.

At the same time, cotton growers have a strong desire to sell seed cotton.

It can be expected that after the sharp fall this month, the speed of lint distribution to the downstream market will accelerate significantly.

In the international market, buying prices from Asian countries support cotton prices at a high level.

According to the latest statistics released by the US Department of agriculture, by the end of November 11th, the US cotton total sales of 2 million 735 thousand tons of land cotton this year, accounting for 8 of the total expected export volume, of which China signed nearly 900 thousand tons of contracted volume and shipped more than 560 thousand tons.

In early November, Chinese textile companies and buyers signed large orders at the US cotton procurement summit held in California, us.

It is expected that China will usher in the peak of the import of American cotton in late December.

In India, despite the delay in India's new cotton listing due to rainfall, the expected increase in production remains unchanged. In mid November, the India Cotton Association adjusted the output of cotton in India to 6 million 69 thousand tons.

According to USDA's forecast data, the export volume of India cotton is about 1 million tons this year, while the India Cotton Association and traders think India's export volume is about 150-200 tons this year, much higher than the 935 thousand tons export quota previously determined.

It is estimated that India may decide whether to increase the new export quota according to the actual export situation and the situation of domestic enterprises.

At present, 892 thousand tons of cotton have been approved in India. According to the regulations, shipment is required within 45 days. Otherwise, it may be "lifted". As of mid November, India cotton has already shipped 136 thousand tons. According to the current progress, there may be a large quantity of India cotton in the middle of December.

The urgency of shipping time and the uncertainty of export volume are still a major problem for cotton manufacturers.

From the price of imported cotton, by the end of November, the imports of medium and high grade cotton were basically around 26000-28000 yuan / ton, and some of the better quality cotton was around 30000 yuan, basically unchanged from the current processing cost of domestic lint.

Three. Analysis of market operation of substitute chemical short fiber

Comparison of price trend of three domestic cotton textile raw materials

The proportion of cotton textile raw materials used by textile enterprises is mainly determined according to the order. Only a small amount of cotton used for spinning will be adjusted flexibly because of the relationship between the three prices.

The consumption ratio of spinning to cotton is about 50-55%, and the amount of elastic adjustment can be estimated at about 500 thousand tons.

Because spot cotton is hard to find, some spinning enterprises try to improve the cotton tight situation by using polyester staple fiber, viscose staple fiber and other substitute products.

At the beginning of November, the price of PET staple fiber rose sharply in China.

Domestic polyester staple fiber increased by 6850 yuan in November. The price difference between cotton and polyester decreased from fifteen thousand in October to ten thousand. Viscose staple fiber rose 7200 yuan. The price difference between cotton and viscose increased from 3300 at the beginning of the month to -2000 at present. The price of viscose staple fiber was 2000 yuan higher than cotton price. At present, the price of polyester staple fiber has decreased slightly, which is mainly affected by the decline of upstream raw materials, while viscose staple fiber market is relatively stable, mainly due to the low inventory of manufacturers, while the upstream raw material cost is rising rapidly.

Four, downstream textile market and textile industry operation analysis

From a macro perspective, the domestic textile industry is running well, and textile production and exports continue to maintain rapid growth.

The domestic market has larger growth space, and the internal and external environment of the textile industry is relatively ideal.

However, it is noteworthy that, compared with the previous nine months, the growth rate of domestic spinning output in October has dropped considerably, and the textile industry added value and textile and garment export growth rate also fell, showing a trend of "before and after high".

For textile enterprises, because the cotton price is rising too fast, the downstream manufacturers are unable to digest in time, which has caused the profit margins of textile enterprises to be compressed.

From September 2010 to November, domestic cotton prices rose by nearly 7, while the price of pure cotton yarn increased by about 65%, and the price of grey fabrics increased by only 10-25%.

In mid and late 2010 of 10, the cost price of some small gray fabric manufacturers began to "hang upside down", and the start-up rate was significantly reduced.

Some spinning mills develop the selling strategy according to the cotton price rising rhythm, which also causes the yarn price to rise passively along with the cotton price.

In the whole process, big factories are better than small factories.

The price range of premium yarn is higher than that of medium and low end products.

Due to the decline of cotton quality under the influence of weather in 2010, the market of cotton with different quality will be differentiated in the future.

Five, policy regulation and impact analysis

Since the end of October to the middle of November, the relevant ministries and commissions of the state have repeatedly said that measures should be taken to ensure the supply of prices and agricultural products.

At the end of September, seven ministries and commissions of the NDRC jointly issued the urgent notice on implementing the spirit of the national teleconference of cotton work to safeguard the current order of the cotton market. The notice required that relevant departments should strengthen market supervision and market inspection, strictly investigate and deal with unlicensed and ultra wide purchase of cotton flowers, strengthen the management of rural cotton brokers, standardize brokers' behavior, and focus on combating quality violations such as the acquisition and processing of hyper moisture cotton, excluding heterosexual fibers, and inconsistent quality and logo.

Premier Wen Jiabao chaired a State Council executive meeting on 17 April to study and deploy policies and measures to stabilize the overall level of consumer prices and safeguard the basic livelihood of the masses.

The meeting decided to increase the external pport capacity of Xinjiang cotton.

Ban on unlicensed acquisition and processing cotton without evidence.

We should strengthen supervision over agricultural futures and electronic trading markets, curb excessive speculation and ban illegal pactions.

At the same time, the meeting pointed out that when necessary, temporary intervention measures should be applied to important daily necessities and production materials.

In November 20th, the State Council issued the notice of the State Council on stabilizing the general level of consumer prices to guarantee the basic livelihood of the masses. At the same time, in less than 10 days, the state raised the RMB deposit reserve rate for two consecutive times, aiming to increase liquidity management, reduce loanable funds, moderate monetary and credit control, and help reduce inflationary pressures.

Administrative measures will affect the main body of the cotton purchase market and suppress the rapid rise of the purchasing price.

It is understood that the departments concerned also have a variety of ways to communicate with enterprises with relatively large market impact, and have a radiation effect on the market through the communication and influence of large enterprises.

Policy decisions and corresponding measures on inflation management have had an impact on the market and pressure on the rise in cotton prices.

Attention should be paid to policy intent and its role.

Six. Technical analysis of cotton futures market

From the trend, cotton prices continue to trend upward in the short term. In November 10th, MACD appeared to deviate from the top. Cotton prices were high, while MACD turned down. Zheng cotton fell down. The average price was down 10 days and 20 days respectively on the 5 day. The domestic cotton price rose from 18500 in early September to 33720 in early November, and 50% of the retracement was near 26110. At present, the market was wide concussion near 25000-30000. Concern about the supporting role of 26000 near the market. If Zheng cotton did not effectively stabilize in the 26000 line, the market focus would move further downward.