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Analysis Of Internal And External Factors Affecting Us Cotton Futures Plunging

2011/2/26 15:44:00 61

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US Cotton Futures Plunged Inside And Outside

From the results of the ICE period cotton paction, the period of February 18th -2 24

ICE cotton

In the four trading days, there were three trading days in May, 1107 and 1112 months. There were 3, 5, 7, and four contracts in December. The cumulative decline reached 2274 points (11%), 2470 points (2470), 2470 points (points) and points (points) respectively.

In February 17th, ICE cotton reached the highest level in history. What are the internal and external factors that have changed sharply after that?

Internal causes:

1. recently, the March contract entered the delivery period.

The market's closing of the March contract should be traced from mid 1 to the end of February.

During the Chinese traditional holiday, the contract stood at more than 170 cents in March. Although the Chinese government kept interest rates on the first day after the Spring Festival holiday, it did not inhibit the rise of the US cotton market. The last few trading days were still expected to be strong. The fund bought the last trading day of the March contract before entering the delivery date (February 21st for us president day, a day off), and it rose to 204.02 cents / pound, a record.

Finally, the market stops on the first trading day of the March contract delivery period.

In March February 22nd, the contract entered the first trading notice day. The formal entry into the delivery period will not be restricted by price limits, which will result in a long profit and lots of short positions.

Two

Futures.

Rapid rise in spot prices and rising prices, no market.

In the period of ICE cotton rising sharply, the international cotton spot has been pushed up passively, the price is no market, buyers and sellers are in the wait-and-see mood.

Although there is not much cotton in the market, the forward sale of cotton is also in a stalemate.

As a large number of cotton arrived in China in 12-3, during this period, the market actively sought out cotton outside the port. At that time, most of the cotton outside the port was ordered, and the selling price was in the same grade as that of domestic cotton.

3., after breaking 200 cents, there will be a demand for callbacks on the technology side.

Forced by the push up behavior, ICE cotton broke through the 200 cent mark for a long time. The technology side experienced serious overbought after many days of rising, but some indicators were still more. But there were signs of callbacks in individual indicators. For example, the main contract average system in May kept a good long run up, but the MACD index red column has a shortened trend.

200 cents is a historic juncture, and it is not surprising that it has been cut down.

The 4.ICE market modifies the rules of raising and stopping prices, raising margin and suppressing market speculation.

In the face of the crazily rising market, the ICE market first adjusted the rules of ups and downs, then raised.

Cotton futures

Trading margin.

According to the new regulation in early February, when the price of cotton did not exceed 80 cents, the rate of decline was still 300 points; when it was between 80.01-110 cents, the rate of increase was 400 points; in the 110.01-140 cents / pound interval, the rate of decline rose to 500 points; when 140.01-170 cents / pound, the rate of decline rose to 600 points; when it reached or exceeded 170.01 cents, the rate of decline rose to 700 points.

In addition, after the first time the current cotton has reached a price limit, if the two or more contracts in the first five contracts have reached a rise or fall, the next day's rate of increase will be increased by 100 points, and the highest rate will be 700.

The margin adjustment is shown in the following figure:

External causes:

1. China once again raised the deposit reserve ratio, and the commodity market declined as a whole.

In February 18th (Friday), the people's Bank of China decided to increase the deposit reserve ratio of deposit financial institutions by 0.5 percentage points from February 24, 2011, reaching a record high of 19.5%, which is also the second time the central bank has raised the deposit reserve ratio since 2011.

Some analysts pointed out that this unexpected news depressed the economic optimism, triggered a lot of technical selling, pressure on CBOT grain futures and COMEX metal futures market, and the ICE cotton market failed to be independent.

2. the Middle East situation ignites bull market in gold and crude oil market, and commodity market and cotton futures are under pressure.

Due to the turmoil in the Middle East, the economic outlook is worrying. On the 22 day, the international commodity futures market plummeted. Only crude oil and gold rose better. The market's risk aversion tendency and crude oil and gold, commodity markets and cotton futures also fell for several days.

When gold futures and crude oil futures are on the rise, it is reasonable for cotton futures to follow commodity futures.

Can the market downturn rest soon? {page_break}

I believe that the ICE cotton main May contract will not continue for a long time and will not continue to boom for a short time before the lack of new speculation.

Recently, many people are questioning that the March contract has been in a tight corner. In May, insiders pointed out that the possibility of forcing the contract in May is not very large, mainly due to the fact that the spot supply of the market is safe before May.

The rise of crude oil and gold did not drive the US dollar to follow up. This has certain support for the ICE cotton market. If the US dollar continues to decline, the market will have the possibility of recuperation as soon as possible. Moreover, the cotton futures market will follow the commodity futures market's trend of long-term market, and look for the support point of the market for a long time.

In short, the market does not currently have the reason to continue to fall. Unless accidents happen, it will be quiet in the short term.