September 17, 2012 Institutional Watch - Cotton Futures

Main points

1. Price Bulletin: domestic lint: 129 level 20499 yuan / ton; 229 level 19628 yuan / ton; 328 level 18752 yuan / ton; 428 grade 17914 yuan / ton.

Domestic textiles: polyester staple fiber 10390 yuan / ton; viscose staple fiber 15780 yuan / ton; C32S price 25630 yuan / ton.

2. domestic stock: on the 14 day, domestic cotton spot prices continued to operate smoothly, but enterprises were more pessimistic about the overall market outlook.

In recent days, the volume and paction price of reserve cotton have continued to decline, showing that textile enterprises are weak in demand for cotton and are cautious in purchasing raw cotton.

3. imported cotton: in September 14th, the price of China's main cotton imports rebounded, and most varieties rose 0.25 cents, which is negligible compared with the recent decline.

On the whole, there was no significant change in downstream demand. Last week, China signed a 60 thousand ton US cotton contract, sparking speculation in the market about China's acquisition and storage of cotton.

4. cotton throwing and storage: in September 14th, the sale of cotton reserves was actually 8887.76 tons, with a turnover rate of 19.66%.

The 328 class cotton price is 18560 yuan / ton (public weight), down 24 yuan / ton compared with September 13th, which is 196 yuan / ton lower than the national cotton price B index (CNCotton B) 18756 yuan / ton.

5. the purchase and storage of new cotton: in September 14th, the China cotton reserve management company planned to collect and store 50000 tons of cotton in 2012. The actual turnover was 1520 tons, with a turnover rate of 3.04%, of which the mainland planned to collect 30000 tons, and the actual turnover was 1200 tons, with a turnover rate of 4%. All of them were in Shandong province; Xinjiang planned to purchase 20000 tons, and the actual turnover was 320 tons, with a turnover rate of 1.60%.

6.ICE cotton: in September 14th, the QE3 plan launched by the Federal Reserve continued to cause investors to sell dollars and boost commodity markets. ICE futures opened at the lowest price all day, and then went up all the way, and basically recovered all the losses since this week.

Summary:

At the same time, the price is different.

The dumping and storage actually reflect the cotton prices in circulation in Chinese society.

After starting, cotton resources will flow to the national reserve.

But before the global demand for cotton has obviously improved, the three tier structure of cotton prices will not change. The circulation price of cotton in China will close to 20400 of the purchase and storage price. However, closing up is far from being able to achieve.

The particularity of China's cotton base determines that QE3 is not well developed.

We recommend a strategy of low price and focus on the 40 and 60 day moving average.

[MEIKO futures] strong shocks in the surrounding commodity market

Overnight, in September 14th, the QE3 plan launched by the Federal Reserve continued to trigger investors to sell dollars and boost commodity markets. ICE futures opened at the lowest price all day, and then went up all the way, and basically recovered all the losses since this week.

Although the fundamentals of the cotton market are still poor, cotton prices are driven by the trend of the peripheral commodity market, and if the future does not fall below 94 cents, it is likely to continue to rise.

News: India Garment Export Promotion Association (AEPC) recently sent a letter to the government. In recent two months, cotton prices in India increased by 3-5%, while the price of cotton yarn increased by more than 15%. We hope to restrict the export of cotton yarn, or to liberate cotton yarn imports and cancel the import tariff of 10% cotton yarn.

However, India area began to be affected by the increase of rainfall, and domestic cotton prices began to decline in India, and the price of cotton yarn in the country would gradually drop.

In the international market, in September 14th, the price of China's main cotton imports rebounded, and most varieties rose 0.25 cents, which is negligible compared with the recent decline.

On the whole, there was no significant change in downstream demand. Last week, China signed a 60 thousand ton US cotton contract, sparking speculation in the market about China's acquisition and storage of cotton.

Even so, under the pressure of new cotton coming to the market in the northern hemisphere, there will be no room for further growth.

Domestic market, 14, domestic cotton spot prices continue to operate smoothly, but the overall market outlook is more pessimistic.

First, the volume and paction price of cotton reserves have continued to decline in recent days, showing the weak trend of textile enterprises' demand for cotton and their cautious attitude in raw cotton procurement; two, after the purchase and storage started, the price of Zheng cotton is still lower than the storage price of nearly 1000 yuan / ton, reflecting the pessimistic attitude of the market towards the latter price trend.

National Reserve dynamics: 1, September 14th, the State Cotton temporary storage and storage of 1520 tons, as of September 14th, 2012 cotton temporary storage and storage pactions totaled 2920 tons, of which 2400 tons in the mainland, 520 tons in Xinjiang.

2. In September 14th, the sale of reserve cotton was sold at 8 thousand and 900 tons, and the turnover rate was 19.66%. As of September 14th, the total sales volume of the reserve cotton was 217 thousand and 100 tons, with a turnover rate of 49.68%.

Spot quotation, September 14th, the US C/A cotton 89.60 (cents / pound), discount general trade port delivery price 15300 yuan / ton (according to sliding tax calculation); Australia cotton 94.60, discount general trade port delivery price 15964 yuan / ton; Uzbekistan cotton 89.60, fold the renminbi trade port delivery price 15300 yuan / ton; West Africa cotton 87.35, discount general trade port delivery price 15013 yuan / ton; India cotton 85.60, discount general trade port delivery price 14796 yuan / ton.

CNCotton A 19628 yuan / ton; B index CNCotton B 18756 yuan.

Market analysis, the current poor capacity of the industry, the pressure of supply makes cotton price action can not be enough.

The domestic market threw the store to ease the slight tension of high-grade cotton, and began to close the store. With the volume and volume, the market will be boosted.

Recent macro benefits

At the 60 day moving average, the defensive battle started, and the trend of internal and external trading was basically the same.