Weak &Nbsp Is Hard To Change; Cotton Price Will Be Low.

Since it fell below the 22000 integer pass in July 19th,

In recent years, cotton holdings have maintained a high position and the gap between them has increased. Uncertainties in the market are gradually accumulating.

In the light of the pattern of weak fundamentals, Zheng cotton has a higher probability of continuing to explore new lows.

World cotton output will resume growth in the new year

The US Department of agriculture's latest supply and demand report has raised global cotton production in 2011/2012 to 24 million 942 thousand tons, although this data has decreased compared with previous estimates, but global cotton production has become a consensus.

According to the prediction of China cotton reserves, China's cotton output in the new year is expected to reach 7 million 400 thousand tons, the second only to 2006 to 2008.

At present, our country

Spot demand is weak, and spot enterprises are selling more cotton at low prices.

Recently, large textile enterprises have lowered the purchase price of lint, which has greatly suppressed market confidence, and cotton spot prices have dropped steadily.

By the end of July 25th, China's cotton grade 328 price index has dropped by 3455 yuan / ton, with a daily decrease of 185 yuan / ton.

The fall in cotton spot prices has led to worries among cotton companies, and the recent rush of new listing dates and the reminder of the Agricultural Development Bank have exacerbated this concern, and a large number of cotton companies are selling cotton at a low price.

Textile enterprises did not buy it, and the number of enterprises that followed them continued to increase.

At present, most of the cotton stocks of textile enterprises have been depleted, but because of the further decline in cotton prices, there is no large-scale purchase, but idle capacity and partial procurement, indicating that the pattern of cotton spot demand has not changed, and Zheng Mian does not have the power to rise.

Country

At present, the price of Zheng cotton has approached the 19800 yuan / ton storage price. The market expects that the purchase price will have strong support for Zheng cotton, or the price will be running on the purchase price.

The author believes that the main role of State purchasing and storage price is to stabilize cotton planting area and protect cotton farmers' income, which has limited support for Zheng cotton futures.

On the one hand, the weakness of spot cotton demand makes the relative surplus of cotton, and the contradiction between supply and demand will aggravate the return of cotton prices. Zheng cotton will also bear down. On the other hand, the national minimum purchase price will prompt the market to rectify the deviation mechanism. When the price of cotton is lower than that of the purchase and storage price, it will generate the current arbitrage, which will bring the price close to the normal level, but the role of its role will be limited by the date of futures delivery.

From a technical point of view, Zheng cotton is still in a long decline in the channel, the recent K-line entities are relatively small, trading volume has shrunk, the 5 day moving average and the 10 day moving average are intertwined, the overall performance is weak.

From the downward trajectory of the earlier Zheng cotton, the price fell to the new platform oscillation finishing 10 - 15 trading days to start a new round of decline, now to the time window.

Therefore, in the case of no obvious improvement in the fundamentals, Zheng cotton continues to explore the probability of a larger.

To sum up, after two weeks' consolidation of Zhengzhou cotton narrow range, it is facing the game of national minimum reserve price support and weak spot demand, but the textile industry chain is facing a painful torment. The weakening of spot demand will also lead to cotton prices, while the slowdown in economic growth and the debt crisis in Europe and the United States will accelerate the decline of Zheng cotton. The probability of continuing to explore new lows in the late stage of Zheng cotton will be greater. Investors can rely on 22000 to establish empty bills and pay attention to controlling risks.