There Is Still Room For Downward Trend In Cotton Market.

Under the influence of domestic cotton price restraint and tightening policy expectations, Zheng cotton has recently continued its weakness.

Although cotton prices have been sharply suppressed in the short term by the suppression of national policies, the current demand and supply shortage determine that cotton prices will remain high, and the era of high cotton prices has arrived.

There are three rigid demands for cotton in 2010/2011. One is the demand for reserves from the state, and the other is the replenishment demand caused by low inventory in the world. In addition, with the sustained growth of China's economy, the domestic textile business needs will also increase.

Judging from the cotton output in the new year, the reduction in production is a foregone conclusion. According to the preliminary estimate of the recent China cotton reserve management company, the total output of cotton in China this year is 6 million 360 thousand tons, with a 5.5% reduction in output.

Cotton supply and demand pattern is still in short supply in the new year, which will keep cotton prices at a high level.

US dollar continues to strengthen, commodity trend is restrained.

In recent years, the US dollar has gone out of the "W" form under the influence of us quantitative easing monetary policy and the European debt crisis.

In order to boost the domestic economy, the United States has launched the second round of quantitative easing policy from the economic data released in the past two weeks.

Regulatory effect showed that cotton and downstream products decreased significantly.

In November, due to the obvious rise in the price of agricultural products, many experts estimated that the consumer price index in November could exceed 4.4% last month, reaching the peak of the year, after which CPI has exceeded 3% of the warning line for 4 consecutive months.

In order to curb inflation, recently, the state has not only started tightening monetary policy, but also issued a series of policies to control prices. Six measures have been put in place to maintain order in the current cotton market and raise futures trading fees and deposits.

As of November 29th, the price of cotton main 1109 contract has dropped from 33600 yuan / ton to 24320 yuan / ton, and cotton spot price has dropped from 31302 yuan / ton to 26289 yuan / ton in November 26th.

Although the cotton industry chain is long, the price pmission is relatively smooth. With the continuous decline of cotton prices, the price of cotton yarn has also been reduced. At present, the mainstream price of C32S is 38500 - 39000 yuan / ton, the high price is 40000 - 41000 yuan / ton, and the price of cotton cloth has dropped 0.2 - 0.5 yuan / meter.

Cotton prices down trend

New cotton's listing, stock increase, state measures to control prices and capital fled and other factors contributed to the decline of cotton spot spot prices.

At present, the main contract in the futures market is 24000 yuan / ton, and the spot market price is close to 26000 yuan / ton. From the spot market survey, the lowest spot price that the hoarding cotton enterprises can bear is 26000 yuan / ton. In addition, judging from the recent spot matching paction, the paction price shows a trend of near high and low. It can be seen that investors are still bearish for the latter part of the cotton trade.

Therefore, I believe that cotton futures prices still have room to fall, but do not rule out a rebound in the downtrend.