Cotton Supply And Demand Pressure Eased Recently, And The Market Tended To Be Normal.

This year cotton came out of the limelight, first from 16380 yuan / ton straight line.

Policy pressure is still being strengthened in commodity futures regulation.

Main influence of cotton price at present

In accordance with the policy spirit of "strengthening supervision over the agricultural futures market and the electronic trading market" in the price control measures, the Dalian commodity exchange, Zhengzhou commodity exchange and Shanghai futures exchange have increased the margins of various varieties, expanded the limit of the trading limit, and restricted the maximum positions.

According to the notice of Zheng Shang, since settling in November 26, 2010,

At the beginning of December, the state will hold an economic work conference to set the macroeconomic policy for next year.

It is expected that before the conference, the state will continue to regulate prices vigorously and supervise the futures market and electronic trading market.

Cotton spot and futures prices will still be dominated by weak shocks.

Price affects demand and supply pressure of cotton supply and demand

Since the beginning of this year, the volume of cotton futures has been gradually enlarged, and the degree of concern is getting higher and higher. The price discovery function of futures has been better reflected.

At present, enterprises in the whole industry chain of acquisition, processing, trade, textile, grey cloth, printing and dyeing and clothing are all concerned about futures prices, and futures prices have also become an important reference for purchasing and selling prices of enterprises.

Take seed cotton purchase price as an example, in the process of cotton futures prices rising, seed cotton prices have been rising all the way. Recently, with the fall in cotton prices, seed cotton purchase prices have also dropped significantly.

According to the traditional view, commodity prices are affected by supply and demand, supply exceeds demand, commodity prices fall, supply exceeds demand, and commodity prices rise.

However, it is often ignored that fluctuations in commodity prices will also have a significant impact on supply and demand.

Take cotton as an example, in the process of rising cotton prices in the early stage, the upstream cotton growers and processing enterprises expected the price to rise, and they were reluctant to sell. The initial supply was only 30% of the same period in the previous year; the expected price of the downstream middlemen and the textile enterprises increased, and the purchase of cotton ahead of time increased.

Similarly, after the recent decline in cotton prices, cotton growers and processors will have a positive desire to ship goods, and the market supply will increase. Downstream textile enterprises will expect prices to continue to fall, postponing purchases of cotton and reducing market demand.

In addition, after entering December, the US cotton will arrive in Hong Kong one after another, and may reach its peak in mid December.

In addition, under the relevant state policies and regulations, Xinjiang cotton output increased before the Spring Festival.

In this way, before the Spring Festival, textile enterprises have ample supply and are in a psychological advantage. It is very difficult for cotton prices to return to more than 28000 yuan.

On the other hand, the future decline in cotton prices is also very limited.

Global cotton output will remain uncertain next year, and the supply and demand of cotton will remain tight in the whole 2010/2011.

If the irrational rise of cotton prices interferes with the normal operation order of the industrial chain, the irrational drop of cotton prices will have a worse effect on the whole industrial chain.

Pay attention to price baseline, timing buying hedging

At present, only 300 thousand tons of cotton are stored in the state, with little regulation of resources.

In order to ensure the strategic safety of cotton, and in order to better control cotton prices in the future, the state needs to restart the storage and purchase plan in 2011 or 2012.

Considering that the average price level of cotton has been raised, we believe that it is most likely that the state will make reference to the actual paction price of the previous cotton sale and make the future purchase price.

That is, when cotton prices enter 20300 yuan / ton to 25000 yuan / ton interval, the state may start purchasing and storage plan.

In terms of trading strategy, the author insisted on the previous view that the textile enterprises with strong financial strength could set up the position of buying and maintaining the value in the current round of decline, and complete the purchase plan for the next year ahead of schedule. The general investors could adopt the shock trading strategy appropriately, such as buying below 25000 yuan / ton, and selling it near 28000 yuan / ton.