Zheng Cotton Trend Weakening Period To Another Level

Zheng cotton futures rebounded slightly after this week's "black Tuesday", but in yesterday's general rally in commodities,

In July 12th, Zheng cotton futures suffered "black Tuesday", and cotton 1109 contract fell 5.16%.

Yu Lijuan, an analyst at Jinshi futures, said that the continued downturn in the downstream textile industry is still a major factor affecting cotton prices. This Tuesday, under the pressure of a short jump in the market, Zheng cotton has broken the pattern of recent consolidation, and the price is going down to a new level.

Zhou Jianrui, a futures analyst at Huatai the Great Wall, said that the main reason for the recent decline in the cotton market was concussion, which was mainly due to the weakening of cotton in the outer market and the inactive purchase and sale of the domestic spot market, especially in the case of individual enterprises in Shandong.

The sale of cotton yarn in some textile mills has become white hot. Some cotton mills are selling less than 21000 yuan per ton of cotton and the cost of living is already a consensus among many textile mills.

Yu Lijuan also said that the spot market of cotton continued to be warm, and spot trading was hard to pick up.

7, in August, the pressure on banks to repay loans increased, and cotton enterprises were forced to sell their lint stocks on the strength of funds and market pressure.

But the cotton textile enterprises are facing the problem of order problems and cash flow, but the pressure on enterprises to inventory is very large. But at present, it is a low season for textile and clothing consumption. Foreign trade, textile exports are still blocked, resulting in the collapse of textile enterprises and the reduction of production.

Cotton spot prices continued to decline, as of 13 days, the 328 grade cotton has dropped to 22575 yuan / ton.

Zhou Jianrui said that the current cotton consumption is off season, and from the perspective of foreign trade, textile exports are also blocked.

In 2011-2012, global cotton output, import volume, export volume and final inventory increased year by year, while consumption decreased year-on-year.

The gap between output and consumption has changed from -56.4 million tons in 2010-2011 to 1 million 48 thousand tons in 2011-2012.

The source is "lack of water" and cotton is weak.

At present, the weak market of cotton market is mainly due to the weakness of downstream consumption.

Yu Lijuan said that from the perspective of the whole industry chain, there is no order for garment factories and home textile enterprises. There is no order for cloth factories.

From the basic supply and demand side, according to the latest USDA data, the total output of the world's cotton in is 26 million 814 thousand tons and the consumption volume is 25 million 419 thousand tons. The gap between supply and demand is narrowed and 1 million 395 thousand tons more than the 2 million 948 thousand tons in the previous year.

Positions, the recent 1201 main positions of Zheng cotton has remained high, as of 14, has increased from 560 thousand to the highest level.

Yu Lijuan said that the reasons for the high position are two points. First, the national storage and purchase plan 19800 yuan / ton storage price, as well as processing costs, capital interest in the vicinity of 22000 yuan / ton, is an important support point for cotton prices, and there is little room for further downward movement.

Secondly, on the basic level, downstream consumption has been very "short of water", and with the continuation of destocking, spinning enterprises will gradually increase the purchase of cotton.

Short somersault is unlikely.

In the short term, it is unlikely that Zheng cotton will have a somersault.

Zhou Jianrui analysis said that on the one hand is the lack of speculation in the upstream cotton cultivation, and the increase of cotton planting area is expected to exist. On the other hand, the domestic downstream market is not active in buying and selling, some enterprises are still in the stage of consumption inventory, and the domestic continuous interest rate increase and raise the reserve requirement, enterprises are still facing the pressure of capital turnover.

Yu Lijuan also believes that in the short term, cotton will continue to be a weak market. It is advisable to operate high throwing operations. In the medium to long term, under the ample supply environment, cotton prices are also difficult to have a big bull market unless the downstream consumption obviously improves and there is a shortage of stage supply.

The cotton price is still weak. With the approaching of new and old cotton, cotton prices will also touch on 19800 yuan / ton for a short time, thus starting the purchase and storage of cotton, when cotton prices will rebound.

Zhou Jianrui said that if cotton is to flip more, or the monetary policy will turn loose in the second half of the year, the commodity market will be active again, and cotton will go up.

In addition, the Fed hints that if the US economy is not as good as expected, and does not rule out the introduction of the third round of loose monetary policy, then the momentum of commodity revival will rise again.