July 9, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] Zheng cotton has more recent shocks.

Main points

1. Price Bulletin: domestic lint: 129 level 20253 yuan / ton; 229 level 19382 yuan / ton; 328 level 18449 yuan / ton; 428 grade 17545 yuan / ton.

Domestic textiles: polyester staple fiber 9760 yuan / ton; viscose staple fiber 14970 yuan / ton; C32S price 25400 yuan / ton.

2. domestic stock: 6 days, domestic

Spot prices are running smoothly.

China and Europe jointly cut interest rates, which can be interpreted as a joint rescue package for Chinese and European leaders. It helps ease the financial pressure on the textile industry and is conducive to the gradual progress of the cotton market in the new year.

3. cotton imports: in July 6th, the price of China's main port of imported cotton fell sharply, to a drop of 1-2 cents.

Last night, the Central Bank jointly cut interest rates to stimulate the economy was interpreted as a major bad market, causing ICE futures to fall again.

According to the cotton traders, sales of imported cotton, especially bonded cotton, were very low recently.

In the face of increasingly tight quotas, the textile industry has a strong wait-and-see mood, and rarely makes inquiries to purchase cotton outside.

4. the central bank has cut interest rates: since July 6, 2012, it has lowered the benchmark interest rate for Renminbi deposits and loans of financial institutions.

The one-year deposit benchmark interest rate of financial institutions has been reduced by 0.25 percentage points, the one-year lending benchmark interest rate has been reduced by 0.31 percentage points, the other benchmark rates of deposit and loan and the individual housing provident fund deposit and loan interest rates have been adjusted accordingly.

5.ICE cotton: in July 6th, ICE futures traded insipid, with less than 10000 hands in volume. The market ignored the adverse effects of the general decline in commodity prices, but fell into a wait-and-see after the crash.

However, the downward pressure on cotton prices has not been alleviated, and the US dollar index has broken up and the US cotton export volume is low.

In addition, investors wait for USDA to announce the July supply and demand report next week.

Summary:

At present, the price of zhengmian has shifted slightly and the fundamentals have shown signs of stabilization.

In line with the recent macro interest in reducing interest rates, Zheng cotton is expected to hold the 40 day moving average.

On the operation, we may use the idea of interval oscillations and more operations, and take the 20 and 40 day moving average as the reference. The above concerns about the pressure of the 19650 early small highs.

Key points:

1, the expansion rate of non manufacturing industries in the US slowed down in June.

2, at present, the purpose of purchasing cotton in textile enterprises is to maintain production, so the characteristics of piecemeal purchase remain unchanged.

Outward trend: New York, July 6 - Cotton Futures on the Intercontinental Exchange (ICE) rose flat on Friday, rebounding from yesterday's downtrend, which resisted the general decline in commodity and financial markets.

The CTZ2 settlement price for the December cotton contract was 70.62 cents a pound, which closed 70.58 cents yesterday. Yesterday, it fell more than 2% due to strong U.S. dollar and weak commodity market.

It has brought the market to the economic data which is probably not optimistic, and the US non farm data is slightly lower than the market expectation, or the commodity will be callback; the domestic cotton market, the import of the cotton warehouse in the bonded area is larger, which will bring pressure to the cotton price increase in the late stage; the textile industry's downturn has not been improved, and the textile industry has seriously restricted the production and production. The textile industry's tolerance to cotton price rises is limited, especially Chen cotton. Although the influence of the current spot market is slightly weaker than the factors affecting the supply and demand of the new season cotton, the 1301 contract of the new season cotton will also be a major pressure on the new year's oversupply pattern. On the operation, the 1301 contracts will only be gradually closed up in the early stage, leaving the field temporarily behind the 19300 line. Early comment: today's economic data released in June, the central bank chose to cut interest rates before data release.

[MEIKO futures] industry funds pressure is expected to ease Zheng cotton will shock upward

Overnight, in July 6th, ICE futures traded insipid, trading volume less than ten thousand hands, the market ignored the adverse impact of the general decline in commodity prices, but fell into a wait-and-see after the crash.

However, the downward pressure on cotton prices has not been alleviated, and the US dollar index has broken up and the US cotton export volume is low.

In addition, investors wait for USDA to announce the July supply and demand report next week.

News, USDA (June 22-28) US cotton export report.

In the week of 2011/12, the net contracted volume of US cotton exports was 19 thousand tons, and the net signing volume of us land cotton exports was 2012/13 million tons in the year of 2011/12.

The export volume of us upland cotton exports is 47 thousand and 400 tons, an increase of 11% over the previous week, an increase of 2% over the previous four weeks average.

In the international market, in July 6th, the price of China's main port of imported cotton fell sharply, to a drop of 1-2 cents.

Last night, the Central Bank jointly cut interest rates to stimulate the economy was interpreted as a major bad market, causing ICE futures to fall again.

The fundamentals of cotton in the world and China have already been very loose. China's economic weakness has been more pressing on market demand, and cotton consumption prospects are not optimistic.

According to the cotton traders, sales of imported cotton, especially bonded cotton, were very low recently.

In the face of increasingly tight quotas, the textile industry has a strong wait-and-see mood, and rarely makes inquiries to purchase cotton outside.

Domestic market, 6, the domestic cotton spot price stable operation.

China and Europe jointly cut interest rates, which can be interpreted as a joint rescue package for Chinese and European leaders. It helps ease the financial pressure on the textile industry and is conducive to the gradual progress of the cotton market in the new year.

But at present, the downstream demand of cotton textile market is sluggish, facing many problems such as lack of orders, rising labor costs and high cost of logistics.

Spot quotation, July 6th, the US C/A cotton quotation is 89.40 (cents / pound), the discount general trade port delivery price is 15017 yuan / ton (calculated according to the sliding tax), the Australian cotton quotation is 92.15, the general trade port delivery price is 15459 yuan / ton, the Uzbekistan cotton price is 90.70, the general trade port delivery price is 15233 yuan / ton, the India cotton quotation is 82.60, the general trade port delivery price 13943 yuan / ton.

The national cotton price A index is 19382 yuan / ton; the B index is 18449 yuan.

Market analysis, cotton due to poor overall consumption capacity, the offensive is limited, and later influenced by the surrounding atmosphere, the passive component is relatively large.

From the industry perspective, firm market pressure is the key factor that restricts the price.

The United States cotton 70 line is expected to continue to move steadily upward, zhengmian 19820 below the pressure.

On the operation, Zheng cotton has more than one holding, and the short distance buyers can buy a small amount on the support of 19200.

On Friday, CF1301 was in a narrow concussion. CF1301 closed more than 15.5 million hands, and its position decreased slightly.

CF1301 closed at 19475 yuan / ton, down 5 yuan / ton, reduced 2380 hand; in July 6th, China imported cotton (FC Index M) 84.25 cents / pound, fell 0.9 cents / pound, 1% yuan tariff reduced price 13556 yuan / ton, sliding price conversion price 14508 yuan / ton.

According to New York's July 6th news, the ICE cotton futures rose flat on Friday, rebounding from yesterday's downtrend, which resisted the general decline in commodity and financial markets.

ICE cotton contract in December fell 0.04 cents, 70.62 cents per pound.

In July 6th, the cotton trading market in the national cotton trading market reached 13620 tons, a decrease of 960 tons compared with the previous day, an increase of 1640 tons in orders and an aggregate purchase of 136160 tons.

Basically, the global central bank cut interest rates at the same time in order to stimulate the real economy to get out of the predicament.

But the response from the US and Europe's commodities overnight is still not positive. It is still rising or falling. It also reflects the fact that the current global economic situation is indeed too weak.

Judging from today's domestic commodity market, it also shows a fall or increase.

Before the end consumer market is improving, the capital market is still hard to make the manufacturing industry recover.

On Friday, Zheng cotton was in a narrow concussion. Last week, the central bank's bailout policy did not receive much response. This week, domestic economic data were released in a row, expecting greater pressure.

People should not be blindly optimistic, Zheng cotton will temporarily oscillate in the 19300-19700 interval, and 19300 is the track of the rebound channel, which needs attention.

Today's operation suggests that light duty operation, interval operation, CF1301 reference price interval is 19300-19600.