October 15, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] adhere to bargain thinking

Main points

1. Price Bulletin: domestic lint: 129 level 20514 yuan / ton; 229 level 19641 yuan / ton; 328 level 18782 yuan / ton; 428 grade 17940 yuan / ton.

domestic

Product: polyester staple fiber 10900 yuan / ton; viscose staple fiber 14890 yuan / ton; C32S price 25690 yuan / ton.

2. domestic stock: 12, domestic cotton spot prices continue to operate smoothly.

In the "national cotton working teleconference", Zhang Xiaoqiang, deputy director of the national development and Reform Commission, estimated that the actual output of cotton in China was about 6 million 900 thousand tons, 300 thousand tons less than the previous year, and the reduction was 4.2%. Although cotton production was reduced, it would not affect the supply of the market, because the textile market in the lower reaches had a weak recovery, and the demand for cotton for textile enterprises was hardly magnified.

3. imported cotton: in October 12th, the price of China's main port of import cotton declined generally, due to the fall in the price of ICE cotton.

In contrast, SM grade import cotton quotations fell slightly.

On the same day, the international cotton index (SM) was 85.03 cents / pound, down 62 points, and the international cotton index (M) was 81.26 cents / pound, or 137 points.

4.USDA: according to the October global cotton supply and demand report of the US Department of agriculture (USDA), the world's cotton production in 2012/13 was 25 million 327 thousand tons, an increase of 501 thousand tons compared to September, 23 million 269 thousand tons of consumption, 148 thousand tons reduction, 7 million 340 thousand tons of global cotton trade, 30 thousand tons reduction, 17 million 225 thousand tons of final inventory, 565 thousand tons of increase, and an increase of 6.6 percentage points in inventory consumption than 74.03%.

5.ICE cotton: the 12 day ICE cotton market recovered some land lost after the previous day's fall. The settlement price in December was 71.36 cents / pound, up 65 points, 1303 months contract 76.53 cents, up 64 points.

Summary:

The relevant government departments will hold a meeting to analyze the current cotton production and marketing situation and deploy the cotton work in 2012, and the NDRC will implement the temporary purchasing and storage policy to ensure open purchase and storage.

But we believe that the three tier structure of cotton prices in China will not change until the global demand for cotton has improved significantly.

USDA's demand and supply report released yesterday showed that global output increased, consumption decreased, and end inventory continued to increase.

We maintain the idea that cotton prices will run at a low level for a long time. On the other hand, we suggest that we should focus on the idea of lowering prices at the time of purchase and storage.

[MEIKO

Overnight, in October 12th, ICE cotton opened slightly higher and the contract rose slightly in December, but failed to break through the recent average.

Futures pricing pactions are not large, and market participants are still strong at wait-and-see mentality.

Before the end of the purchase and storage, whether the Chinese government will introduce new regulatory policies is the focus of the industry and the biggest uncertainty in the market.

News, according to the national cotton monitoring system survey, as of October 12th, the average daily use of cotton in the sample survey enterprises was about 34.3 days (including the number of imported cotton to the port), a decrease of 2.2 days, an increase of 5 days compared with the same period, an increase of 3.4 days compared with the average level of nearly three years.

According to relevant data projections, the national cotton industry inventory of about 754 thousand tons, a decrease of 6.2%, an increase of 16.6% over the previous year, an average inventory reduction of 4.2% over the past three years (excluding state reserve stocks), the pressure is still undiminished.

The international market, in October 12th, was affected by the fall in ICE cotton prices, and the price of imported cotton in China's main port generally declined.

In contrast, SM grade import cotton quotations fell slightly.

Considering that China will not increase the quota of cotton imports in 2012, the international cotton market will temporarily lose support for China's consumer demand, so the possibility of falling cotton prices is greater.

Domestic market, 12, domestic cotton spot prices continue to operate smoothly.

In the "national cotton working teleconference", Zhang Xiaoqiang, deputy director of the national development and Reform Commission, estimated that the actual output of cotton in China was about 6 million 900 thousand tons, 300 thousand tons less than the previous year, and the reduction was 4.2%. Although cotton production was reduced, it would not affect the supply of the market, because the textile market in the lower reaches had a weak recovery, and the demand for cotton for textile enterprises was hardly magnified.

In October 12th, China Cotton store planned to store and store 2012 tons of cotton 141600 tons in October 12th. The actual turnover was 104670 tons, with a turnover rate of 73.92%, of which the mainland planned to collect and store 55600 tons, 19230 tons of actual pactions and 34.59% turnover.

As of that day, the total turnover was 773960 tons, of which 142200 tons were traded in the mainland and 631760 tons in Xinjiang.

Spot quotation. In October 12th, the price of C/A cotton in the US was 86.60 (cents / pound). The general port trade delivery price was 14844 yuan / ton (calculated according to the sliding tax); the Australian cotton quotation was 92.90; the general port trade port delivery price was 15648 yuan / ton; the Uzbekistan cotton quotation was 86.90, the general port trade delivery price was 14881 yuan / ton; the West African cotton price was 83.60, the general port trade delivery price was 14481 yuan / ton.

The national cotton price A index was 19643 yuan / ton, up 1 yuan; the B index was 18784 yuan, up 1 yuan.

Market analysis, with the increase in the number of new cotton listed, the spot pressure increased earlier, some of the textile enterprises are still using the early stage of the storage of cotton, the market turnover is still sluggish, prompting the recent storage of some volume, consumption is still a key factor restricting the height of cotton prices.

Cotton rose slightly in the ICE period last Friday and is expected to be difficult to change in the short term.

Domestic cotton trading is light, and capital attention is very low.

Operation, waiting for the purchase and storage pition, trend wait, short and narrow interval pactions.

[one German futures] down relay Zhengyang cotton single holder

Friday CF1301 low shock, CF1301 close closing more than 6.1 million hands, a small increase in holding.

CF1301 closed at 19435 yuan / ton, down 55 yuan / ton, increased 5036 positions; in October 12th, China's imported cotton (FC Index M) 84.10 cents / pound, fell 1.35 cents / pound, 1% yuan tariff reduced price 13614 yuan / ton, sliding price conversion price 14544 yuan / ton.

According to information from New York on October 12th, the price of cotton during the ICE period rose on Friday, recovering some of the land lost after the US Department of Agriculture issued the crop report on Thursday, and traders said it was the worst in decades.

ICE12 cotton settlement price was 71.36 cents per pound, up 0.65 cents on that day.

In October 12th, the cotton trading market in the national cotton trading market reached 9820 tons, 4340 tons less than the previous trading day, the order quantity reduced by 1920 tons, and the total order 86400 tons.

On the 11 day, the contract was opened to the whole line, and the concussion came down during the day.

Cotton outlook is even more bleak and cotton prices appear to be showing no signs of rising.

Due to the support of purchasing and storage, although the news of cotton production and consumption has been shrinking, the spot price is rising slowly, except for the actual turnover of cotton market. This will lead to a worse or worse cotton price inside and outside the textile industry, and the textile enterprises will face more difficult predicament.

On Friday, Zheng cotton was in a low concussion, and the pressure on Thursday began to descend. The overnight air alone could continue to hold. The target was 19200. Generally speaking, the shock interval was hard to break.

The mayoral period exists.

Today's operation suggests that overnight air bills can continue to hold, and the CF1301 reference price range is 19200-19500.