Although There Is Support To Break Through, It Is Difficult Before The Cotton Market Is Hard To Rise.

Yesterday, the Zhengzhou Mercantile Exchange cotton futures remained at 29000 yuan per ton up and down. The decision of the central bank to raise the reserve ratio is right. market Produced a certain suppression, although the support of Zheng cotton below is strong, but the price of Zheng cotton will not break through in the future.

First of all, further regulation of the macro economy will have a greater impact on the market. Recently, the people's Bank of China decided to increase the deposit reserve ratio of deposit financial institutions by 0.5 percentage points from January 20, 2011, which is the first time that the central bank has raised the reserve ratio since 2011. Hon Hai futures believes that the central bank's interest rate rises before the introduction of macro data itself is limited to the market, and the direct frozen capital is only about 350 billion. However, the worry of its transfer may be perplexing the market for a long time.

Under the influence of China's raising the deposit reserve ratio, the international cotton price has been suppressed. In January 14th, ICE delivered in March this year. cotton Futures contracts closed down 2.62 cents to 1.4144 dollars per pound, and the intraday trading range was $1.4119 -1.4595 per pound. Local market participants believe that China's latest tightening policy or slowing its economic growth and curbing commodity demand. The international cotton market will be closed on Tuesday and will be reopened on Tuesday.

Second, the supply and demand side of the domestic cotton market is happy. On the supply side, the report released by the Cotton Research Association of Chinese Academy of Agricultural Sciences on Friday showed that China's cotton output in 2010 fell 14.6% to 5 million 700 thousand tons, due to abnormal weather conditions and crop yields. The association's estimate is far below the 6 million 650 thousand tonnes of the Cotton Association's output forecast, which is 2.1% less than the same period last year.

The dry weather in northern provinces will indirectly affect the cotton planting area in the Yellow River basin next spring.

The drought situation in winter is more severe. Shandong and Henan, as the main cotton producing areas in the the Yellow River River Basin, must first pay attention to the influence of drought on soil moisture. In addition, the two winter wheat crops have been sown as a crop that has a strong relationship with cotton. If drought affects them, it will not rule out planting other crops in spring.

In terms of demand, according to the first textile net, the inventory of cotton mill has increased obviously, which has brought heavy pressure to its operation. From the perspective of weaving, the inventory situation of products is slightly better than that of textile enterprises, but the order situation is slightly insufficient. The order situation may deteriorate further before the Spring Festival, and the uncertainty after the festival is still large, and the management strategy is prudent. At present, manufacturers are cautious about purchasing cotton, and plan to extend the Spring Festival holiday to relieve pressure.

Downstream cotton terminal textiles clothing The real recovery of orders will not be until after the Spring Festival. Therefore, if there is no unexpected news stimulus, the market difficulty before the holiday will rise sharply.

MEIKO futures pointed out that raising the deposit reserve ratio will push cotton prices into a quagmire of turbulence. At present, the 1109 contract of zhengmian main force has fallen into the shock interval of 27800 yuan -29000 yuan per ton, and investors should focus on short-term operation.