Purchasing And Storage Strongly Support &Nbsp; Cotton Price Is Hard To Break Through Effectively.

Because of the close of the year, the liquidity squeeze has intensified again.

In recent years, Zheng cotton oscillation is warming up, the main CF1205 contract is moving upward, and the price is around a narrow line of 20700 lines.

With the continuous enlargement of cotton reserves, the number of medium and high grade cotton gradually decreases, and the expected temperature increase is also increased.

Money wait-and-see sentiment aggravated

Economic growth in Europe and the United States has improved, but economic improvement is still variable.

Last week, the European Central Bank launched a refinancing scheme that exceeded expectations, and US employment and real estate continued to heat up. However, it remains to be verified whether the economy will continue to warm up. The pessimism in the market has not fundamentally changed.

ICE cotton weekly holdings were significantly reduced. Last week, there were only 8721 holdings of funds arbitrage reflecting interest in funds, a drop of nearly 30% compared with 12543 in early October.

Meanwhile, the position of Zheng cotton has dropped to its lowest level since two years. The main CF1205 contract is only 168 thousand hands. Signs of funds are obvious, and sentiment is strong.

Adjust the expected temperature rise

As the new year is approaching, the textile enterprises are short of funds and the market is expected to heat up.

According to the people's Bank of China data, by the end of 11, China's financial institutions accounted for 25 trillion and 450 billion yuan in foreign exchange, less than 27 billion 900 million yuan in October, which is the second consecutive month of foreign exchange reduction and the largest decline since December 2007.

The reduction of foreign exchange can be considered as a paving the way for policy adjustment. The market expects that the central bank will carry out quasi reduction operation before and after new year's day, fine tune monetary policy and properly release liquidity, which will be like a long drought for the textile industry.

There are variables in the issuance of quasi tax quotas.

Recently, the Ministry of finance has fine tuned the formula of sliding tax in 2012, and the cost of imported cotton has increased after adjustment, which has played a certain protective role in domestic cotton prices.

It is reported that in 2011, the state issued a total quota of 3 million 600 thousand tons of imported cotton, while the amount of cotton imports from 1 to November amounted to 2 million 570 thousand tons, and the quota utilization rate was only 71%. There were still nearly 1 million tons of quotas not used.

After the new year's day, the state will announce the number of sliding tax quotas in 2012, and the way and quantity of the quasi tax quotas may be changed. It may redistribute the existing import quota of foreign cotton, causing the fluctuation of quota price, causing the cost of imported cotton to change, and this also increases the uncertainty of domestic cotton price.

Caution in spot purchases

Recently, spot prices have stabilized, and spot market enquiries have increased. However, due to concerns about orders and downstream products sales, textile enterprises are cautious in purchasing. Many enterprises still adopt small purchase strategy and first look for buyer's reproduction strategy.

New year's Day is approaching. In previous years, it was time for textile enterprises to concentrate their replenishment, but this year, due to insufficient orders, procurement did not significantly enlarge and the spot market was weak.

Textile Enterprises Limited production and shut-down phenomenon is widespread, some textile enterprises to stop, and even some enterprises simply stop working in advance.

At present, the mainstream price of C32S in the cotton mill is between 25500 yuan and 26000 yuan per ton, and the higher price is around 27000 yuan / ton. If the production profit is very low according to the raw material of 19156 yuan / ton, the textile enterprise's enthusiasm for production is not high.

At present, the acquisition of cotton in the middle of storage is coming to an end, and the total amount of acquisitions has been constantly enlarged so as to boost the price.

At present, nearly 1 million 800 thousand tons have been successfully acquired, and the storage period is expected to receive 2 million 500 thousand to 3 million tons. Most of the middle and advanced cotton will enter the national reserve, and later high-grade cotton may become more and more popular, while the imported cotton grades are lower, and some textile enterprises begin to reserve high-grade cotton for rainy days.

The purchase and storage undoubtedly tightened the liquidity of cotton and formed a certain support for the price. But whether or not to stabilize the planting area of cotton in 2012 depends on the continuity of the policy.

In addition, the cotton stored in the state has not been consumed, but it has become a bargaining chip for the state to regulate cotton prices, and will also exert some pressure on market psychology.

To sum up, near the annual level, liquidity tightening is aggravating again, market adjustment is expected to rise, and the quantity and mode of quasi tax quotas have great variables, which will have a greater impact on the late cotton imports. The situation of spot cotton's downturn is hard to change. Zheng cotton is facing greater upward pressure; while the lower part is facing strong support for storing and storing days, Zheng cotton is unable to break through effectively and has a higher probability of maintaining a narrow oscillation.