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Cotton Prices Are Hard To Make In March.

2012/3/23 12:41:00 4

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Around March every year, China's cotton demand began to enter the peak season, but this year still continues the 2011 peak season after the Spring Festival is not prosperous, this undoubtedly makes the already vulnerable in the atmosphere of the cotton industry.

The only hope in the market is shattered. Where will cotton prices go?

The mechanism of storage and storage is limited.

In order to protect the interests of cotton farmers and protect the enthusiasm of cotton growers, the state started in 2011.

Purchasing and storing mechanism

In the 2011/2012 cotton purchase and storage price of 19800 yuan / ton stabilized cotton prices, even in the European debt crisis continued to suppress the commodity and the United States Department of Agriculture released monthly cotton supply and demand report bad influence, Zheng cotton price is still holding 19800 yuan / ton storage price.

Entering the 2012, after the cotton price rebounded, the weak market began to fall. The pessimism of the market began to revive. The price of the 2012/2013 purchase and storage of the investors concerned was released at the end of February. Although the purchase price of 20600 yuan / ton is different from the 21000 yuan / ton expected by the market, the state raised the purchase and storage price of 600 yuan / ton, indicating that the low cotton price era has become a past tense, and the possibility that the cotton price will drop further down is very small.

Cotton planting intention to reduce support cotton prices

Entering the year March, agencies will launch the spring planting cotton planting area in succession.

Can cotton purchase and storage price stabilize cotton growers' cotton planting intention in 2012/2013? From our analysis, this year, in order to stabilize grain production, the minimum protection price of grain increased by 18 yuan / Jin Jin, and the grain cotton ratio was lower than 1:7, far below the normal 1:10 level.

The low yield ratio of cotton and cotton can not boost the enthusiasm of cotton growers. Moreover, due to the low mechanization of cotton planting and the hard work of planting cotton, the planting area of cotton planting area is expected to decline.

In other words, cotton prices in the US and India are lower than cotton prices in China, and cotton planting area is also facing a sharp decline.

The area of cotton planting has dropped, and it has become the second card in the market.

Storage and storage is about to end.

The new cotton purchase and storage in 2011/2012 will end in March 31, 2012.

Domestic cotton reserves

It will reach about 3 million tons.

The surplus cotton in the market is basically returned to the national reserve. The question is, in order to meet the capacity of the cotton storage and storage in 2012/2013, how will the country turn round this year? I guess, with the current cotton situation, before the end of the storage and the spring sowing area of the cotton, the country can not choose to throw it away, because it will cancel the effect of the 20600 yuan / ton storage price and the stable cotton planting area in the new year.

In addition, it is unlikely that the state will choose to lose or sell reserves. Taking into account the cost of cotton, the cost of warehousing, the cost of capital interest and the cost of dumping and storing, the state needs to wait until the market price of cotton rises to about 20700 yuan / ton before it can be sold.

Considering the factors that affect the dumping and storage, the timing may be between 6 and July. There is a slight rebound in the price of zhengmian, but the scope is limited.

"Bad season" decides that cotton prices are difficult to make.

Market demand for peak season in March did not arrive as scheduled, and the peak season continued.

In 2011/2012, global cotton is in a state of excess, with the weak demand in the lower reaches, which undoubtedly leads to a further surplus of cotton.

The market thought that the stock of cotton in the downstream textile enterprises is not high. In March, a small wave of replenishment should start.

Downstream cotton enterprises mentality is more pessimistic, generally not optimistic about the cotton market outlook.

Under the pressure of supply pressure, demand determines the rising space of cotton prices.

Now that the peak season is not prosperous, cotton prices are hard to say.

In summary, the peak season of cotton is not strong. It depends on the mechanism of purchasing and storage, the decline of cotton planting area and the end of storage.

Anticipation of dumping

Under the influence of common factors, it is difficult for cotton prices to rise and fall.