August 9, 2012 Institutional Watch - Cotton Futures

[Hongyuan

Main points

1. Price Bulletin: domestic lint: 129 level 20294 yuan / ton; 229 level 19436 yuan / ton; 328 level 18524 yuan / ton; 428 grade 17617 yuan / ton.

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

2. domestic stock: 8, domestic cotton spot prices rose slightly.

Recently, the main cotton producing areas in China are affected by bad weather. The rainfall is uneven and the extreme weather is frequent. Cotton has varying degrees of disaster. Cotton price has slowly entered the track of rising prices under the combined action of expected reduction in production and storage.

3. imported cotton: in August 8th, the price of China's main port of imported cotton fell slightly, and most varieties fell 0.25 cents.

At present, the market remains light, and textile mills are not interested in buying cotton.

Despite the poor weather and speculation that China will increase quotas for the time being, foreign cotton quotas have increased temporarily, but before the market demand really restores, it is difficult for the cotton to maintain a rising trend.

4. Cotton Growth: according to the US Department of agriculture (USDA), 5 to August, the emergence rate of new cotton flowers was 98%, an increase of 5 percentage points from the previous week; 93% in the same period last year, and 94% in the past five years.

The fruit setting rate of new flowers was 74%, 15 percentage points higher than that of the previous week, 74% in the same period last year, and 70% in the last five years.

5.ICE cotton: in August 8th, investors adjusted their positions before the USDA supply and demand report was released, and ICE futures broke 76 cents under the stimulus of buying.

Judging from the market situation, because of the recent monsoon rains in India, investors generally believe that USDA will reduce India's cotton production or even global end inventory.

Summary:

The two major factors that affect domestic cotton prices are demand and policy, and there is no substantial change in demand.

With the approaching of the new cotton year, cotton enterprises expect cotton prices to come closer to the purchase and storage price. Under this expectation, there is limited space under zhengmian, and as cotton enters the critical period of growth, the weather may become a theme to boost Zheng cotton's uplink.

The next step is to suggest that investors adhere to the idea of getting more money in the long line and pay close attention to the pressure of 19700 yuan / ton at the top of the platform.

Wanda futures hype India weather, ICE cotton continues to rise before USDA monthly report

Because the monsoon season is postponed, the monthly demand and supply report released by the US Department of agriculture on Friday may cut India's cotton production forecast, which led investors to continue to adjust their positions. Overnight ICE cotton rose again, and the main contract in December rose 0.6 cents to 76 cents / pound, continuing the rebound trend.

But India's output cut is not enough to change the pattern of serious oversupply of the global supply. If the report can not be better than expected, if ICE is better or weaker than expected, the cotton in phase ICE will face the pressure of callback. We are not optimistic about the monthly report, and it is advisable to treat the rebound cautiously.

Technically, ICE phase cotton Xiao Yang received, the main contract in December for three consecutive days stabilized 75 cents / pound, KD and MACD indicators continue to rise in a row, MACD index red column growth, short-term average line system has formed a trend of rising trend, the rally will continue, December contract is expected to fight 80 cents / pound line pressure level.

As the overall market is still in a weak position, following the lack of buying and lack of capital and popularity support, Zheng cotton on Wednesday hit a high level and ended up under 19400 yuan / ton.

Although the delayed monsoon rains in India may lead to drought in the cotton region, while India may restrict cotton exports, these can not change the global consumption slump and the downturn in China's consumption.

At the same time, China's cotton price is still significantly higher than the international cotton price, China's export orders continue to decline, the downstream cotton yarn and terminal market continues to deteriorate, and the overall market confidence is insufficient, which fundamentally inhibits the rebound of cotton prices. The textile enterprises have limited affordability to cotton and lack the fundamentals and macro support. Zheng cotton is hard to get rid of the current weak pattern and continue to pay attention to the 1301 contract 19400 yuan / tonne pressure level. If an effective breakthrough is made, the rebound will continue, and the single stop loss will be left on the sidelines. In January, it will challenge the 19700 yuan / tonne pressure level. Otherwise, Zheng cotton will continue to decline, relying on the pressure level to continue to increase its holdings, and short-term target 19100 yuan / ton line.

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[MEIKO futures]USDA good expectation is expected to be difficult to shake off cotton if it fails.

Overnight, investors adjusted their positions before the USDA supply and demand report was released in August 8th, and ICE futures broke 76 cents under the stimulus of buying.

Judging from the market situation, because of the recent monsoon rains in India, investors generally believe that USDA will reduce India's cotton production or even global end inventory.

If USDA data are unfavorable to the market, it is expected that cotton will erase the recent gains.

Index ICE the cotton contract in December rose 0.8%, at 76 cents per pound, 0.30 cents lower than the intraday high.

On the news, the US agricultural Counsellor's latest report said that the cotton planting area in India is expected to be 159 million mu in 2012/13 and 3 million mu less than the same period last year. If the rainfall can not be improved in August, the sowing area may be further reduced.

The output is expected to be 5 million 100 thousand tons, lower than the US Department of agriculture forecast of 119 thousand tons. At present, the export price of India cotton is still higher than the international cotton price. The import demand of domestic textile factories has increased, and export enterprises have increased domestic sales.

In the international market, 8 days, the price of China's main port of import cotton was slightly reduced, and most varieties fell 0.25 cents.

At present, the market remains light, and textile mills are not interested in buying cotton.

Despite the poor weather and speculation that China will increase quotas for the time being, foreign cotton quotas have increased temporarily, but before the market demand really restores, it is difficult for the cotton to maintain a rising trend.

Domestic market, 8, domestic cotton spot prices rose slightly.

Recently, the main cotton producing areas in China are affected by bad weather. The rainfall is uneven and the extreme weather is frequent. Cotton has varying degrees of disaster. Cotton price has slowly entered the track of rising prices under the combined action of expected reduction in production and storage.

Spot quotation, August 8th, the US C/A cotton quotation is 91.35 (cents / pound), the discount general trade port delivery price is 15548 yuan / ton (calculated by sliding tax), the Australian cotton quotation is 96.60, the general trade port price is 16262 yuan / ton, the Uzbekistan cotton price is 94.60, the general trade port price is 15985 yuan / ton, the West African cotton price is 88.10, the general trade port delivery price is 15126 yuan / ton, the India cotton quotation is 88.60, the general trade port delivery price is 15190 yuan / ton.

The national cotton price A index was 19442 yuan / ton, up 3 yuan; the B index was 18530 yuan, up 2 yuan.

Market analysis, the recent market forecast USDA will lower the end of the global inventory and India production to promote the external market strength, if tomorrow is less than expected, there will be a risk of fall; China's upcoming acquisition and storage in September and the bad weather conditions in the two river basin cotton area also support high cotton prices consolidation, the whole lack of hype theme, speculative capital shortage and market pressure is too large phenomenon exists objectively, is still defined as a broad shock market.

The US pressure is 78 and the zhengmian pressure is MA60.

In operation,

The bottom is picking up. Today we focus on whether Zheng cotton can stabilize on the 60 day moving average. If we can stabilize it, we can try more.