Market Demand Is The Sword To Solve Inventory Problems.

In August, the US Department of agriculture raised 2012/2013 again in China.

The end of the stock to 7 million 442 thousand tons, an increase of 518 thousand tons, and China's total cotton consumption to 8 million 491 thousand tons, the domestic cotton inventory consumption ratio also rose to 87.65%, the ratio increased by 7.14 percentage points and a record high.

Supply is improving and demand is decreasing. The contradiction between supply and demand will determine the future trend of cotton prices from a market perspective for a long time.

Cotton imports are as high as 5 million 130 thousand tons.

According to customs statistics, in July 2012, China imported 406 thousand tons of cotton, an increase of 248 thousand and 900 tons, an increase of 158.46%. From September 2011 to July 2012, China imported 5 million 134 thousand and 800 tons of cotton, an increase of 2 million 767 thousand and 100 tons compared with the same period last year, an increase of 116.87%.

In the past, China imported more than 5 million tons of cotton in 2005, but at that time the Chinese economy was in a period of rapid growth. The increase in demand was the main factor of expanding imports. Now, a large number of imported cotton is more likely to be a long-term strategic reserve.

In addition, it is estimated that the import volume of cotton imports in August is still at a high level, and the total import volume of cotton will reach 5 million 500 thousand tons this year.

Cotton textile export situation is still grim.

According to statistics, in 5 and June, the export of cotton yarn and cotton cloth in domestic textiles reached a relatively good level in the same period, up by 33% and 21% over the same period, but this phenomenon did not last.

In the month of July, textiles and garments exported 23 billion 890 million US dollars, down 8.1% from the same period last year, of which 8 billion US dollars in textile exports decreased by 8%, and clothing exports 15 billion 890 million US dollars, down 8.1%.

The export situation of clothing is better than that of textiles from the aspect of export chain.

Exports grew by 9.7%, and textiles decreased by 4.8%. Textile exports are still facing a more severe situation.

Prices of cotton by-products have increased in recent years.

The price of domestic cotton by-products has increased recently, which is affected by the rise in the price of soybean meal. Cotton pulp prices are in the top. At present, cottonseed meal is around 2626 yuan / ton, up 9% over the middle of July, and the price of cottonseed has steadily increased.

At the same time, due to the recent fall in the price of soybean oil and palm oil, cottonseed oil will hardly rise in the near future.

US cotton short advantage slightly

According to the latest data, the number of non commercial short positions in the ICE exchange 2 cotton occupies a certain advantage, among which the number of non commercial short positions is 67317, accounting for 37.10%, and the proportion of non-commercial long positions is 33.70%.

In addition, the US cotton continued to collect shade recently, and the trend index MACD formed a dead fork.

Summary and operation suggestion

The policy is expected to become the focus of market speculation once again. Investors' expectation of China's policy is an important factor to support the steady growth of cotton in the domestic market.

From a technical point of view, 15 days, Zheng cotton went up and down successfully, successfully broke through the pressure of multiple moving average lines, and the possibility of short-term average moving to help rise, suggesting that investors should buy more short-term trading, but not to catch up.

Another need to remind investors is that in the face of huge cotton stocks and future incremental inventory, policy adjustment alone is not realistic.

Inevitably, we will enter the era of stock conversion and stock cycle pformation, and market demand is the swords to solve the problem.