October 16, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] Zheng cotton insist on bargain and do more 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: 15, domestic cotton spot prices continue to operate smoothly.

At present, the progress of new flower picking has been quickening in all cotton producing areas of the country, and nearly 60% new flowers have been picked up in the country. However, due to various factors such as market demand, purchase and sale price difference and purchasing and storage policy, both cotton enterprises and cotton traders are very cautious.

3. imported cotton: in October 15th, the price of China's main port of imported cotton increased slightly. Most varieties increased by 0.25-0.5 cents, and the varieties increased by 0.95 cents.

However, the rising price of cotton has little to do with the fundamentals of the market.

At present, as the new cotton is coming to the market in the northern hemisphere, the market is in a stage of excessive supply pressure, and the Christmas order is also expected to be greatly reduced due to the economic downturn in Europe and the United States.

4.ICE cotton: in October 15th, speculative buying at the late stage of intervention changed the consolidation situation after the opening of ICE futures, and the contract rose rapidly in December, closing up 98 points.

Cotton prices rebounded for the two consecutive trading day from last Friday, basically recovering the last week's decline.

Analysts said that as the market fundamentals did not change significantly, cotton prices rebounded to a large extent by the speculators, while the market pessimism has not yet eased, cotton prices have continued to decline after consolidation.

Summary:

In the downturn of global economic growth,

In the long run, when demand is difficult to solve, the three tier structure of cotton prices in the Chinese market is difficult to change.

USDA and the WASDE released in October 11th further reduced the demand for cotton in China in 2012/13. The background of the "three order theory" has not changed.

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.

[one German futures] average pressure to suppress Zheng cotton single hold

On Monday, CF1301 was in a narrow concussion. CF1301 closed more than 7.2 hands, and its position increased slightly.

CF1301 closed at 19430 yuan / ton, up 5 yuan / ton, increased 7822 positions; in October 15th, China's imported cotton (FC Index M) 84.48 cents / pound, up 0.38 cents / pound, 1% yuan tariff reduced price 13675 yuan / ton, sliding price conversion price 14595 yuan / ton.

According to New York's October 15th news, the price of ICE cotton rose again on Monday, as speculative buying helped the market rebound from last week's downtrend.

Last week, the US government's crop report was the worst in decades, causing a sharp fall in cotton prices.

The ICE12 monthly settlement price is 72.34 cents per pound, up 1.3% within a day.

In October 15th, the cotton trading market in the national cotton trading market reached 10480 tons, an increase of 660 tons over the previous paction, an increase of 200 tons in orders and an aggregate purchase of 86600 tons.

On the 12 day, the opening price of each contract was high and low.

Basically, the demand for textile products in the near future has not improved significantly. The form of the whole textile enterprise is still severe, and it will not bring much impetus to cotton.

On Monday, Zheng cotton was in a narrow concussion, and the price was suppressed by all the EMA. The overnight target could continue to hold. The target was 19200. In general, the shock interval was hard to break, and the policy market existed for a long time.

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

[Wanda futures] speculative buying support for us cotton rebound

Although USDA issued the worst monthly report last week, ICE cotton rebounded for two days after losing cash. On Monday, with the support of speculative buying, the December contract closed up 0.98 cents to 72.34 cents / pound. In this way, the strong support of 70 cents / pound was once again verified, but this could not change the weak pattern of cotton prices.

At present, global consumption is still weak due to the recession in the euro area. The new cotton market in the northern hemisphere is on the market. The supply pressure is showing up. The global end inventory is as high as 1700 million tons. In this case, cotton price has no power and foundation to rise, and the probability of maintaining the low side is bigger.

Tuesday ICE cotton continued to rise, the main force of the December contract stable short term average line, the average system has maintained a good drop in the arrangement, although KD and MACD indicators continue to fall short of the arrangement, but the two indicators are in the low adhesion to form a rising trend of ranking, MACD index green column short, cotton prices have strong trend, low-level sideways will continue, pay attention to 70-73 cents / pound side area.

Statistics released by the Bureau of statistics on Monday showed that China's CPI rose 1.9% in September, but lower than 2% in August, while PPI declined 3.6% in the same period, the largest decline since November.

Data show that China's economy continues to deteriorate and is at the edge of recession. Worries about the economic outlook will enable enterprises to continue to reduce inventories, while textile enterprises' cotton yarn and grey fabric inventory are at a high level for nearly three years, and cotton stocks are also high, which will curb their demand for raw materials.

In the northern hemisphere, China, India and the United States are coming out of new cotton. Supply pressure is beginning to show, sales pressure is increasing and demand is hard to be stimulated. Spot cotton prices will remain weak, though.

Because of the strong resilience of purchasing and storage, it is difficult to support the rise of cotton prices, and keep the short term thinking to continue to hold empty single 1301 contract empty, 19400 yuan / ton supporting the target to 19000 yuan / ton line.