Zheng Cotton Price Is Hard To Overcome.

From May 21st to May 25th,

The price will continue downward.

1301 the contract became the main contract, at 19560 yuan per ton, down 340 yuan / ton compared with the previous week, or 1.71%, while the 1209 contract closed at 18765 yuan per ton weekend, down 290 yuan / ton, or 1.52% percent from the previous week.

First, India is letting go of exports.

Two, the cotton import quota issued in China.

Three, a substantial increase in inventory next year.

In the next year, the price of our cotton purchasing and storage underpinning is 20400 yuan, but the storage time will start from September this year, and the short-term support for the market will be limited.

First, weak spot market demand.

According to recent research, because the domestic cotton price is far higher than the international cotton price, the small and medium cotton yarn enterprises stop working and leave more, and gradually enter the summer off-season, short-term demand is difficult to pick up.

The cost of labor in foreign markets such as Vietnam and Bangladesh is 900 yuan / month, electricity charges are 0.3 yuan / degree, and the cost of cotton is 11000/ tons.

Compared to domestic textile enterprises, the cost of grade 4 cotton is 16000 yuan / ton. According to the current situation, many small and medium-sized cotton yarn enterprises are eliminated.

Many enterprises plan to use cotton stocks to run out, and do not plan to enter cotton before the holidays.

In Yuncheng, Shandong, the overall operating rate of the enterprises is still below 70%, opening and closing, and holidays have become normal.

Most of the cotton stocks of the investigated enterprises remain in 10 days, and few enterprises can use them for 1-2 months. The quality of such cotton yarn is relatively stable, and there are stable orders throughout the year.

In the off-season, the actual purchase or more cautious in the lower reaches is most pessimistic for the cotton yarn market.

Two. Global inventory high next year

The May supply and demand report released by USDA showed that the global cotton output in 2011/12 was 26 million 789 thousand tons, 2.1 tons lower than the April forecast, 23 million 185 thousand tons of consumption, 274 thousand tons reduction, 9 million 56 thousand tons of imports, 102 thousand tons increase, 9 million 96 thousand tons of export, 143 thousand tons, and 14 million 562 thousand 14 million 562 thousand at the end of the year.

It is estimated that the United States will produce 3 million 391 thousand tons, increase 4 thousand tons, export 2 million 482 thousand tons, consume 740 thousand tons, and end the stock of 740 thousand tons, without adjustment.

China's cotton consumption is 9 million 145 thousand tons, 108 thousand tons reduction; the next year China's import volume is 3 million 48 thousand tons, less than 1 million 633 thousand tons this year.

In addition, USDA released the first report of the next year, that is, the 2012/13 production report. It is estimated that the world's cotton output will be 25 million 406 thousand tons next year, 23 million 941 thousand tons of consumption, 8 million 195 thousand tons of imports, 8 million 191 thousand tons of export, and 16 million 57 thousand tons of final inventory.

It increased by 1 million 495 thousand tons compared with 14 million 562 thousand tons in the current year, an increase of 10%.

{page_break}

Three, China and India policy bad cotton prices

After entering May, the policies of China and India have changed, and these policies are bad for cotton prices.

In May 5th, the Commerce Department of the Ministry of Commerce and industry of India issued a notice to allow India's state-owned Cotton Corp to export cotton in 2011/12.

In this way, once the looser export policy is extended, India's low price cotton will continue to supply China's market continuously and lower the price of China's cotton.

China, despite previous expectations, may not issue cotton quotas to prevent the impact of low cotton prices abroad.

But in the end, some enterprises have already got the new import quotas.

Four. The warehouse receipts registered by Zheng merchants are on the high side.

According to the survey results of China cotton information network, in April, the total inventory of industrial and commercial enterprises in China totaled 3 million 181 thousand and 200 tons, less than 3 million 697 thousand and 800 tons a year ago.

However, demand for textile enterprises has decreased significantly this year, which basically meets the demand of this year.

The number of warehouse receipts registered by Zheng merchants has stopped growing this week, but is still at a high level, indicating that the hedging pressure is greater.

By May 28th, there were 3345 cotton warehouse receipts, 13 fewer than last week, but the total volume is still higher than that in the same period in 2011. The higher warehouse receipts will inhibit the rise of zhengmian futures price to a certain extent.

The quantity of warehouse receipts and the closing price of cotton in recent years

Five, long term storage and storage is insoluble.

The so-called "far water is not close to thirst", according to the planned annual national price of 20400 yuan per ton of cotton, but due to the earliest to start in September this year, the short term effect is limited.

Assuming that the policy of open purchase and storage in the next year will remain unchanged and the enterprises are familiar with the spot delivery and storage process, they will have the relevant qualifications and consider buying futures and sending them to the state reserve after the price continues to fall.

According to the total amount of funds, the cost of buying a ton of cotton is about 600 yuan in half a year. If the profit target is set at 600 yuan, if the Zheng cotton 1211 contract and the 1301 contract fall to 19200 yuan, there will be a certain investment value.

Trading strategy

Weak hard to change, cautious wait and see

After a continuous week of decline, Zheng cotton short line or technology rebound, but bad factors still exist, including India's liberalization of exports, domestic enterprises receive sliding quotas and the next year's inventory increase.

According to the plan, the state will open the store at 20400 yuan / tonne, but the actual start will not begin until September, and the short-term weakness will continue.

On strategy, prudence and wait-and-see are appropriate and space should be changed with time.