At This Stage, Cotton Prices May Be Mainly Based On The Trend Of Shock Adjustment.

In the past month, the US dollar index has continued to weaken. crude oil And other commodity prices are rising rapidly, the global currency. policy Tightening situation continued; domestic inflation pressure increased, the central bank continued to raise interest rates and deposit reserve ratio. New York cotton futures prices are high and volatile, weak textile sales, finished product inventory backlog, cotton spot spot prices down.

Recently, the electronic disk has been continuously explored at home and abroad. Price Maintain a slight downward trend, the transaction is still weak; cotton yarn prices decline, sales situation is still pessimistic. Due to the unfavorable external environment, coupled with the weak demand in the downstream market, a large number of textile factories, including China, have cancelled the US cotton order contract. With the gradual entry of cotton in the southern hemisphere, the supply pressure has eased and the cotton price has become a pressure. Cotton prices are expected to remain weak in the near future.

Downstream demand sluggish

Downstream demand is reported to be the biggest negative factor in the market. The traditional peak season has nearly halved, the textile market has not improved, but on the contrary, there has been a worsening trend. The market pessimism has been increasing, and the spot price of cotton will continue to be suppressed. Cotton yarn and fabric, which dominate the textile industry, have always been the focus of attention. The decline of textile market in the first quarter of 2011 has not improved significantly. At present, the spot price of cotton is up to 24000 yuan / ton, and the average price of KC32S cotton yarn is around 33000 yuan / ton. Theoretically, most of the enterprises are in a state of capital preservation. In fact, as the inventory of cotton enterprises in textile enterprises should be at least half a month to 1 months, most of the cotton used by most enterprises is high priced raw materials purchased at the early stage, making the actual cost higher. Moreover, there are still a large number of enterprises, due to large inventory, impeding capital turnover, the phenomenon of selling goods is inevitable. Therefore, under the current market conditions, cotton yarn breakeven production is common. Under the drag of the macroeconomic situation and the weakening of the spot market, the futures market will continue to maintain a low level of volatility. It does not exclude that the price center will move further downward. However, the current pattern of tight supply and demand in the cotton market has not changed fundamentally. With the downward adjustment of flower and yarn prices, the resistance to further decline will also appear, but it is still hard to predict when the equilibrium position will be achieved.

In the international market, the signs of price rise in April of this year have finally emerged after many early speculation and data reports indicate that the price of American clothing is about to rise. In April, US retail clothing prices (including footwear) rose by 0.3% over the same period last year, though not as high as food and service prices (3.2%), but the retail price has reached its highest level in nearly fifteen months, according to the US Labor Bureau. Affected by the rising cotton price in the early years, the global textile supply chain has been full of pressure of expansion in recent months, and the profits of retailers are less and less, so they have to transmit pressure to consumers. According to the analysis of historical data, the increase in the cost of imports of cotton garments to apparel retail prices will take about 9 months, so although the cost of garment imports has declined recently, the trend of retail prices will probably not disappear before 2012, and the zero price increase in the next few months will reach the highest level in nearly twenty years. This makes the market very pessimistic about the growth of cotton consumption.

Cautious and cautious after market

From the macro level and the middle industry level, we selected 32 economic variables from eight aspects: monetary policy, industrial production, purchasing managers' index, investment, price, exchange rate, foreign trade and interest rate as the factor reserve library, and studied the short-term and long-term cointegration relationship between these economic variables and cotton market. Based on the comparison and screening of economic variables in categories and categories, we have formed a multi factor model based on two sets of samples. A group of samples has a long time, which includes five factors: the long term trend variables of M1 and M2 growth, the short term state variables of consumer price index (CPI), the short-term state variables of import and export, and the interim state variables of the loan balance. It has 12.68% explanatory power for the monthly return series of cotton cities. The other group of samples has a shorter time, including the following three factors: the long-term state variables of M1 and M2 growth rate, the short-term state variables of import volume, and the three variables of the mid-term state variables of finished goods inventory, which has 31.41% explanatory power for the monthly yield series of cotton cities. According to The three variables of foreign trade and industrial added value lag behind the cotton market, which is a long-term positive relationship. In terms of price variables, CPI and cotton market are lagging behind for a long time. Producer price index (PPI) has a leading trend in cotton market. The investment in fixed assets is two months ahead of the cotton market, which is a long-term positive relationship with cotton market. Electricity consumption grew to 1 months ahead of the leading market. In the multi factor model of leading cotton market, there are two quantities: PMI's diffusion index -- production volume and export order. This year, the export orders of Guangzhou Fair are significantly lower than last year. Combined with the judgement of the decline trend of production volume, we are more cautious about the market in the next half month.

Under the dual contradiction between the higher inventory of downstream products and the weaker pressure of warehouse receipts, cotton prices may be dominated by the trend of shock adjustment. With the increase of supply of new cotton in South America, the short run of zhengmian is expected to drop.