Cotton Price Interval Consolidation Difficult To Change The Medium Term Rally

As consumers waited for the US Department of agriculture's monthly supply and demand report on Friday to watch the market, the 7 day ICE cotton trend was moderate, with the main contract in March falling 0.06 cents and finally closing at $1.3037.

On the basic side, some market participants believe that the USDA monthly report to be released on Friday is likely to further reduce global cotton production forecasts.

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It is understood that the acquisition price of seed cotton has been rebounded in the spot market in various parts of the country recently. The acquisition of seed cotton in some enterprises in Akesu, Xinjiang has been reported at 11-11.30 yuan / kg (lint 40%, moisture 13-15%), rising by 0.2-0.4 yuan / kg compared with the end of November. At present, the spot high-grade lint price has rebounded back to around 28000 yuan, and the sales attitude of the enterprises facing the current unstable risk policy has been improved.

According to the information of China Cotton Association, in November 2010, the cotton growers association of China Cotton Association conducted an investigation on the intention of planting cotton in 2011 in 263 counties and more than 1700 designated farmers in 12 provinces and cities in the mainland.

The survey results show that: the cotton price in the early stage is high, the enthusiasm of cotton farmers to grow cotton is increased, and the cotton price fluctuation has increased in the later period, and cotton farmers are in a dilemma.

Analysts believe that due to the current grain price more attractive than cotton prices, plus agricultural prices and labor prices and labor costs are higher than grain income, it is estimated that the global cotton planting area may not increase significantly in the spring.

From the policy perspective, the central economic work conference will be held soon, and the specific connotation of monetary policy turning to "prudent" will be clearer.

The National Bureau of statistics will announce economic data such as CPI in November on the 13 th. The market is expected to see a high point in the year. Referring to the "common practice" of interest rates raised by the central bank several times before the CPI announcement date, the possibility of raising interest rates in the near future is very great.

In response to the sensitive window period of interest rate increase, the short-term market of the cotton market will intensify.

According to China's weather network 7 reported that in the next three days, most parts of Inner Mongolia's Middle East and Northeast China have small to moderate snow or snow. Among them, some parts of Southeast Inner Mongolia, Heilongjiang, the Middle East, Jilin and Eastern Liaoning have heavy snow and local snowstorms. Most of the southwest part, the southern part of the Yangtze River and the northern part of Southern China have a small to moderate rain process from west to East, and heavy rain in some parts of Western Yunnan.

To sum up, the market is waiting for the latest monthly report of the US Department of agriculture. This week, the sensitive period of interest rate window is increasing. Market sentiment is strong. Market participants believe that the rise of cotton futures will benefit from strong fundamentals and the overall trend of commodity futures. Eventually, high cotton prices will inhibit cotton demand, but the price at this stage is far from the real impact on demand. Analysts Zhai Naigang believes that the trend of repeated cotton prices will continue in the near future. The main reason is that the market is worried about the policy pressure, but the tight supply of basic faces is still difficult to change the rising trend of the new year's mid and late term.