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Zhai Naigang: The Cotton Market Is Currently Short Of Factors.

2011/3/15 15:53:00 75

Zhai Naigang Cotton Market Supply And Demand

At present, there are many factors in the cotton market.

At present, there is still uncertainty in the external environment. The recovery of market confidence remains to be seen. The downward pressure on short-term prices remains unchanged, and the price of technology is strong in the 27000-29000 intensive trading areas.

Once the price hits the region, it will attract textile companies to buy in, and thus rebound.

In the medium and long term, cotton prices are still expected to rise again due to tight supply and demand factors.

First, fundamental analysis.

The US Department of agriculture's latest world cotton supply and demand report in 2010/11 is expected. Output in India and China has been cut, and output in Brazil and Australia has increased.

Faced with factors such as global output, ending inventory reduction and export upgrades, most people in the market think that because of the lowest global inventory in the current year, once global output problems or cotton consumption in major cotton countries are increasing, there will be no cushion for global cotton supply.

But there is a great divergence of views on the outlook for demand.

For China, the reduction of output will increase the demand for imports, so the possibility of international cotton prices will remain high in the next year.

Judging from the market situation for nearly a week, with the continuous decline of the electronic disk market of cotton and cotton, the spot quotation has been loosened, and the shipments of cotton merchants have been enhanced. However, due to the serious backlog of the stock in the textile mill itself, the price of the products has been increasing.

Purchasing market

The deal is light.

At present, the dilemma faced by textile enterprises lies in the changes in the external environment and the changes in macro policies. The impact on the market is more and more over the past. Under the tight supply expectation, the textile enterprises are worried that they can not buy cotton. On the one hand, they worry that the cotton market will have a great impact on the sale of finished products, and the market mentality is very unstable.

In recent years, domestic policy tightening and downstream textile enterprises' domestic sales and export market growth have dropped, causing the market to worry about cotton consumption in the later stage, resulting in a more atmosphere in the cotton market.

In addition, the February economic data released by the National Bureau of statistics showed that CPI rose by 4.9% in February, compared with last month's data. The PPI of industrial products rose by 7.2% over the same period last year, higher than 6.6% in January, which is significantly higher than the market expectations, and the pmission of PPI to CPI will gradually appear, coupled with the high international oil prices, and the market inflationary pressure will increase.

The tightening policy of raising interest rates or raising reserve requirements in March is still a matter of probability. Cotton prices are bound to be suppressed by the state's macroeconomic regulation and control, and the uplink of cotton prices will be blocked.

Medium-term trend Outlook:

Cotton market

At present, with the presence of short and short factors and strong spot position, Zheng cotton is less likely to continue to fall sharply, and the probability of maintaining high volatility is greater.

Judging from the current global inventory, the overall inventory is still not enough for consumption demand. As the world's largest exporter of cotton, the supply of the United States is now close to the inventory limit. Whether India can increase exports as a second largest exporter will directly decide the global cotton supply in the first half of this year. If India chooses not to increase exports, then the cotton price in the first half of the year is still expected to maintain high consolidation under the support of tight supply factors.

Interpretation of trade data: according to customs statistics, in February 2011, China accumulated

Imported cotton

184 thousand and 200 tons, 53% less than in January, 17% less than the same period last year.

In the 1-2 months of this year, the total import of cotton was 575 thousand tons, an increase of 10% over the same period last year. In the first half of this year (2010.9-2011.2), the total import volume was 1 million 459 thousand tons, an increase of 36% over the same period last year.

In February 2011, China's spinning output was 1 million 889 thousand tons, an increase of 321 thousand and 400 tons, an increase of 20.5%, a decrease of 161 thousand tons, a decrease of 7.85%.

In September 2010 -2011 February, China's yarn production totaled 13 million 771 thousand tons, an increase of 1 million 318 thousand and 800 tons compared with the same period last year, an increase of 10.59%.

In 2011 1-2, China's yarn output totaled 3 million 939 thousand tons, an increase of 15.3% over the same period last year.

At present, the sale price of 40 cotton yarn is between 38000 yuan and 39000 yuan. If the cost of 6000 yuan and the necessary profit are deducted, the cotton price between 31000 yuan and 32000 is acceptable to all enterprises in the industrial chain.

It can be predicted that if cotton prices drop to around 28000 yuan, it is likely to attract textile companies to buy in.

Two. Technical analysis

The price of Zhengzhou cotton futures contract 1109 began a deep callback in February 17, 2011 after hitting a new high of 34870 points. At present, the price has broken down the 30 thousand pass under the support averages of 60 days, and the short line pattern of the middle line has been further confirmed.

However, from the recent positions of members, both sides have reduced their holdings. On the disk, they are not willing to sell short positions, so if the external environment is stable, the cotton will also rebound.

Short term support at 28000 points, strong support below 27000 points.

To sum up: Analyst Zhai Naigang pointed out that the current cotton market is short of factors.

Recently, the external financial market turbulence and macroeconomic policy factors have led to a sharp adjustment in cotton prices.

At the same time, supply and demand factors still exist on spot fundamentals. Once the external environment stabilizes, it will continue to strongly support high cotton prices.

Once the price hits the region, it will attract textile companies to buy in, and thus rebound.

In the medium and long term, cotton prices are still expected to rise again due to tight supply and demand factors.