July 17, 2012 Institutional Watch - Cotton Futures

[Hongyuan

US cotton faces double pressure

Main points

1. Price Bulletin: domestic lint: 129 level 20260 yuan / ton; 229 level 19394 yuan / ton; 328 level 18466 yuan / ton; 428 grade 17559 yuan / ton.

Domestic textiles: polyester staple fiber 9730 yuan / ton; viscose staple fiber 15050 yuan / ton; C32S price 25380 yuan / ton.

2. domestic stock: according to the monitoring system of the national cotton market, recently, the high-grade cotton quotas in some provinces in the mainland have experienced a sharp rise and fall. However, the number of pactions has not yet been effectively followed up.

3. imported cotton: in July 16th, the price of China's main port of imported cotton rose substantially, and the varieties generally rose by 2-3 cents.

Restricted by quotas, cotton enquiries and pactions are still very light in the past week, and the price fluctuation of cotton has no guiding significance for spot sales.

At present, cotton continues to arrive in Hong Kong, and inventory is still backlog and goods are still slow.

4. industrial inventory: as of July 9th, the average daily use of cotton in the sample survey enterprises was about 33.6 days (including the quantity of cotton imported to Hong Kong), a decrease of 2.4 days, a decrease of 1 days compared with the same period in the past three years.

According to relevant data projections, the national cotton industry inventory of about 757 thousand tons, a decrease of 6.7%, a year-on-year decrease of 13.8%, an average inventory reduction of 16.7% over the past three years.

5.ICE cotton: in July 16th, ICE cotton continued to rise in December.

Technically, the US cotton is facing double pressure of the 60 day moving average and the 74.50 high points.

Summary:

Recently, the price of high-grade cotton in some provinces in mainland China has been on the rise and fall, but the number of pactions has not been effectively followed up. In futures, every upward rush of cotton futures will be significantly restricted by the fundamentals.

Since the beginning of June Zheng cotton vibration center of gravity gradually raised, at the same time the upper face of the pressure of 19650 frontline, similar to the shape of the triangle, the operation may as well adopt the way of interval concussion, below the 20 and 40 days of the average intersection point 19330 near the reference, above the 19650 high point pressure, if the breakthrough can be short line high, but at the same time, even though Zheng cotton breakthrough 19650, the above pressure is still not small, 19900 is another pressure near 19900.

[one German futures] spot price matches Zheng cotton continues to rebound

Monday CF1301 days shock, CF1301

More than 22.7 hands, holdings increased slightly.

CF1301 closed at 19570 yuan / ton, up 115 yuan / ton, increased 6684 positions; in July 16th, China's imported cotton (FC Index M) 87.39 cents / pound, up 3.1 cents / pound, 1% yuan tariff reduced price 14054 yuan / ton, sliding price conversion price 14890 yuan / ton.

According to New York's July 16th news, ICE cotton futures closed higher on Monday as traders pointed to speculative buying due to a drop in the dollar to a one month low and a rise in grain.

ICE cotton contract in December rose 0.64 cents, or nearly 1%, at 73.30 cents a pound.

In July 16th, the cotton trading market in the national cotton trading market reached 14900 tons, a decrease of 4020 tons compared with the previous day, an increase of 1360 tons in orders and an aggregate purchase of 150700 tons.

On the basic side, China's GDP data are better than expected, boosting the global commodity market.

From the perspective of market performance, under the current situation of weakening basic weakness and the confusion of macroeconomic situation, the parties concerned will shift the focus of speculation to the weather.

On Monday, Zheng cotton opened up a concussion, leaving little space in the down space, and concerned about the breakthrough of the 19700 resistance above. It is a good policy to do more along the rebound channel. Zheng cotton is expected to continue to rebound, and 19500 is the track of the rebound channel.

Today's operation suggests that light duty operation is more continuous and CF1301 reference price range is 19500-19700.

[MEIKO futures] China's cotton capital encountered hail Zheng cotton

On the news side, according to the latest statistics of the National Bureau of statistics, in June 2012, China's spinning output was 2 million 833 thousand tons, an increase of 276 thousand tons, an increase of 10.8%, an increase of 164 thousand tons, an increase of 6.1%.

In September 2011 -2012 June, yarn production totaled 26 million 53 thousand tons, up 14% over the same period last year.

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In the international market, there are still a certain number of high-grade cotton, Brazil cotton and West African cotton arriving in the main port in 7 and August. The storage capacity of bonded warehouses is even more intense. Some importers and traders' gold chains are at a high risk. If there is no news of the quota issuance in August, some cotton enterprises will be closed down.

By mid July, no news had been heard about the issuance of quotas for cotton imports. Although cotton textile enterprises, importers and foreign merchants demanded the state to catch up with import quotas, the government departments did not respond.

In the domestic market, according to the Ministry of industry and information technology survey, as of the end of June, the loss of cotton textile enterprises in China reached 40%, and below 30 thousand spindles, the production and output of the spinning enterprises were close to 50%. In July, the situation of loss and stop production showed an enlarged trend. Cotton demand and decline were far greater than the expectations of the relevant ministries and committees.

As the small and medium sized cotton textile enterprises have cut down production on a large scale, cotton import quotas are also "one vote hard to get", resulting in the backlog of foreign cotton in the main port free trade zone in China can not be cleared to enter the warehouse of China's cotton mill.

Spot quotes, July 16th, C/A cotton in the United States

For 91.55 (cents / pound), the general trade port price is 15359 yuan / ton (calculated according to the sliding tax), the Australian cotton quotation is 93.10, the general trade port delivery price is 15616 yuan / ton, the Uzbekistan cotton quotation is 92.80, the general trade port price is 15566 yuan / ton, the India cotton quotation is 85.50, the general trade port delivery price is 14456 yuan / ton.

The national cotton price A index was 19395 yuan / ton, up 1 yuan; the B index was 18471 yuan, up 4 yuan.

Market analysis, the "Xinjiang cotton capital" of Awati, China is still experiencing a rare hail weather news to boost the news, zhengmian yesterday's price has been high in the morning, but the current statistics hail 50 thousand mu of cotton affected, the impact on output is roughly 2-2.5 million tons, the impact will not be too great.

The trend is expected in the near future.

Operation, supporting position 19300, pressure level 19650, interval short line operation.

[Huaan futures] good news, Zheng cotton will continue to shock upward.

Key points:

1, the German parliament will vote on the Spanish banking rescue act on 19, to decide the progress of the European debt crisis.

2, the annual economic conference will be held on Wednesday. A new round of policy regulation is expected to boost the domestic market.

3, as a big exporter of cotton, India has recently received large rainfall. The next year's output will be reduced by 220 thousand tons, Lido cotton city.

External trend: New York July 16th, cotton futures on the Intercontinental Exchange (ICE) closed higher on Monday. Traders pointed to speculative buying due to a drop in the dollar to a one month low and a rise in grain.

The cotton contract in December rose 0.64 cents, or nearly 1%, at 73.30 cents per pound, with a range of between 72.10 and 73.40 cents per trading.

Early comment: Recently, ICE cotton and Zhengzheng cotton have made a weak bottoming up, but the fundamentals of the rice cakes have not improved much, especially the demand for the downstream textile enterprises is still weak. But recently, due to the speculation of the weather, oil products and other agricultural products have gone up, and the cotton that can not fall is only a little bit of light. The volume and the shrinking position of cotton in the cotton market are the best proof, and the market is hardly popular.

But recently, loose monetary policy at home and abroad has brought warm winds to physical enterprises. The cotton price of domestic spot market has stabilized potential. Short term cotton prices will maintain a slow trend of lifting the center of gravity, but with high prudence, they will continue to hold more in the early stage. The main target of zhengmian 1301 is 19600, second target 20000.

In operation,

1301, in the early stage, we should continue to hold more, the first target 19600.