Global Cotton Supply And Demand Face Tighter &Nbsp; Cotton Price Decline Blocked

According to the May 9th report of the American welfare Stone Company, last week (May 2-6), most of the main cotton producing countries

Judging from the supply side of this year, the total volume of new flower in India has increased by only 2.6% over the same period last year. As the listing is coming to an end, the weekly listing volume will gradually decrease, so the cotton production in the country is unlikely to reach the latest forecast of USDA (total output of 5 million 440 thousand tons, up 8.7% over the same period). From the demand side, although the recent breach of contract has been increasing, USDA has been forecasting the US cotton export volume for 3 million 429 thousand months in the past 6 months. According to the current shipment schedule, the US cotton export volume is expected to reach 3 million 484 thousand tons, or second high.

Therefore, overall, supply is decreasing and demand is increasing or supporting cotton prices this year.

For the year 2011/12, although the increase in global cotton production will increase the final inventory, the weather in the US cotton producing area is really worrying and the final output may not reach the expected level.

According to the latest monitoring data, millions of acres of cotton fields have been flooded in the 5 cotton producing areas near the Mississippi River Basin. The cotton planting progress is lagging behind the same period in previous years. It is expected that rainfall will increase or deteriorate further this weekend.

In addition, the drought relief in Texas has not led to a sustained increase in the rate of abandoned farming in the state. The increase of cotton planting area can not make up for the significant reduction in yield caused by the increase in the rate of abandoned farming and the decrease in yield per unit area.

From a technical perspective, the market will not be oversold at present, and the contract spreads in the near and distant months are expected to shrink. According to the latest data from the US Commodity Trading Commission, the net interest rate rose slightly last week, to 13.2%.

In the short term, ICE cotton futures prices are more likely to fall into the US $140 / pound area, and it is still necessary to observe whether there is a breakthrough in 100 cotton prices.