October 26, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] storage and purchase period to do more

Main points

1. Price Bulletin: domestic lint: 129 level 20520 yuan / ton; 229 level 19645 yuan / ton; 328 level 18791 yuan / ton; 428 grade 17969 yuan / ton.

domestic

Product: polyester staple fiber 10690 yuan / ton; viscose staple fiber 14360 yuan / ton; C32S price 25665 yuan / ton.

2. domestic spot: domestic cotton spot prices continue to operate smoothly.

State purchasing and storage high protection prices continue to curb the purchase of textile enterprises to real estate cotton, with the expansion of the difference between inside and outside cotton, a small number of textile enterprises choose 40% tariff import low price cotton.

3. imported cotton: in October 25th, the price of China's main port of imported cotton continued to decline, and most varieties fell by 1-1.5 cents.

Although the price range of imported cotton is not small, according to the current 86.30 cent of EMOT varieties in the United States, the 40% import tariff calculation is generally adopted in textile mills. The general trade pick up price of this variety port is 19254 yuan / ton, which is not attractive to textile mills.

4. seed cotton purchase: (19-25 October), the main cotton seed picking work is coming to an end, the price is basically stable, the processing cost is limited, the processing risk is doubled, the spot sale is not profitable, and the cotton enterprises actively carry out the storage.

Among them, the overall quality of seed cotton in the mainland is generally high, the acquisition of enterprises is more cautious, and the quality of seed cotton in Xinjiang is better.

5.ICE cotton: in October 25th, ICE futures stabilized after falling 4 cents this week. In December, the contract narrowed throughout the day, and volume decreased significantly.

USDA US cotton export data show that last week, cotton prices were rising in a clear way to curb spot demand. In addition to China's signing of more than 10 thousand tons of cotton, other textile mills also broke up, leading to a net export volume of only 8 thousand tons of cotton.

Summary:

The early market worried that the quality of the new cotton quality in the United States is too high, which can not generate warehouse receipts, nor is it acceptable for textile mills. However, under the background of weak cotton demand and large inventory in China, the quality problem of US cotton is not enough to significantly affect cotton prices in China.

Next, Zheng cotton still takes stability as the keynote, and has limited space in the storage and purchase period. The author focuses more on the strategy of lowering prices.

Yesterday CF1301 was supported near 19550, and there are 19450 strong support underneath.

[Yi De futures] main contract shift warehouse Zheng cotton bias air shock

Thursday CF1305 low concussion, CF1305 closed more than 4 hands trading, holding a slight decrease.

CF1301 closed at 19575 yuan / ton, down 85 yuan / ton, reduced 516 hand; in October 24th, China imported cotton (FC Index M) 84.76 cents / pound, fell 1.15 cents / pound, 1% yuan tariff reduced price 13719 yuan / ton, sliding price conversion price 14630 yuan / ton.

According to the news of New York on October 25th, the price of cotton in the ICE period was flat to a slight high on Thursday. The market has been lagging behind in the past week because of worries about supply shortage.

ICE12 monthly settlement price is 72.73 cents per pound.

In October 25th, the cotton trading market in the national cotton trading market reached 12280 tons, an increase of 1600 tons over the previous paction, an increase of 1240 tons in orders and an aggregate purchase of 61440 tons.

On the 25 day, the opening of each contract was mixed.

Basically, the domestic cotton spot market has been stable in recent years, and the price trend of cotton yarn is relatively stable.

The whole cotton yarn market is weary, with only a single variety of pactions. Most of the imported yarn, such as Ba yarn, India and Vietnam yarn, is still very active, accounting for more than 60% of the total imports.

Thursday Zheng cotton low concussion, at the beginning of the month 05 contracts greater pressure, cotton intertemporal arbitrage there are some investment opportunities, more than 01 contracts empty 05 contracts, 01 contract will be more resistant in the future, suggested empty single holder shift to 05 contracts, lower target 19300.

Today's operation suggests that the empty list should be shifted to 05, and the reference price range of CF1305 is 19300-19600.

[MEIKO futures] phase cotton price steady period cotton narrow oscillation

Overnight, ICE futures stabilized after falling 4 cents this week. The December contract narrowed throughout the day, and volume declined significantly.

USDA US cotton export data show that last week, cotton prices were rising in a clear way to curb spot demand. In addition to China's signing of more than 10 thousand tons of cotton, other textile mills also broke up, leading to a net export volume of only 8 thousand tons of cotton.

At present, spot demand is still insufficient, and cotton prices need to continue to fall to stimulate textile mills to enter the market.

On the news side, the European Parliament recently passed textiles and garments imported from Pakistan temporarily.

Such tariff exemption measures will have adverse effects on the EU textile industry, especially the cotton textile industry, which will be dissatisfied with the EU industry.

International market, 25, the main port of China's imports of cotton prices continued to decline, most varieties fell 1-1.5 cents.

At present, the global macro-economy is still in the doldrums, and the market anxiety has not been alleviated. At the same time, the lack of downstream consumption has led to a downward trend in cotton prices.

Overall, the overall market environment is empty. If textile mills can purchase at low cotton prices or temporarily inhibit the downward trend of cotton prices.

Domestic market, 25, domestic cotton spot prices continue to operate smoothly.

Global economic growth is weak, textile industry climate index continues to be low, cotton demand continues to be weak, and inventory is high. It can be said that in the next two or three years, the global cotton market will enter a relatively relaxed stage.

In October 25th, the national cotton temporary storage and storage business reached 77230 tons. As of that date, 2012 cotton temporary storage and storage pactions totaled 1473000 tons in 2012, including 351720 tons in the mainland and 1121280 tons in Xinjiang.

Spot quotation, October 25th, the US C/A cotton 87.60 (cents / pound), discount general trade port delivery price 14968 yuan / ton (calculated by sliding tax); Australia cotton 93.60, discount general trade port delivery price 15741 yuan / ton; Uzbekistan cotton 89.60, discount general trade port delivery price 15220 yuan / ton; West Africa cotton 85.35, discount general trade port delivery price 14692 yuan / ton; India cotton 83.60, discount general trade port delivery price 14481 yuan / ton.

The national cotton price A index is 19646 yuan / ton; the B index is 18792 yuan.

Market analysis, weak capacity of the industry, resulting in cotton enterprises still focus on purchasing and storage. The competition in the territory has been fierce. The phased policy has been supporting the cotton price. The trend is not optimistic about the cotton market in the first half of 2013. Once the Chinese government purchases and stores, the domestic and foreign cotton will have a strong expectation of falling back.

The outer disk returned to the 70 line of support, with a lot of pressure on top of it.

Operation, the early empty single continue to hold, see the 60 day average line performance.

[Wanda futures]ICE period cotton stabilisation

The market ended the hype about the tight delivery of US cotton. After two straight days of decline, ICE cotton returned to the plate area before its rise. On Thursday, cotton fell steadily in the ICE period. In December, the contract closed 0.06 cents to 72.73 cents / pound.

At present, the new cotton in the northern hemisphere, China, the United States and India are listed on a large scale, but consumption is dragged down by the recession in the euro area, and consumer buying is hard to be stimulated. In the future, ICE cotton will remain weak. It is not ruled out that the December contract will again challenge the strong support of 70 cents / pound integer.

Thursday ICE cotton stabilized to stabilize, but in December the contract still closed in the short-term average, KD and MACD indicators have formed a downward trend of adhesion, MACD index red column shortened, cotton prices weakened, the trend will continue, December contract will once again challenge 70 cents / pound line strong support position.

As of October 24th, Xinjiang accounted for 85% of the total volume of public inspection, which led to spot.

Resources are tight, so Zheng cotton has maintained relatively strong strength.

However, the recession in the euro zone has resulted in global consumption shrinking, the expansion of domestic and foreign cotton prices, the lack of competitiveness of Chinese and foreign products in the international market, the further weakening of demand, the limited consumption of cotton and cotton yarn being squeezed, and the domestic cotton being hard to get the favor of textile enterprises. Zheng cotton is hard to attract textile enterprises to buy interest, lack of support for capital and popularity, Zheng cotton is hard to get rid of the long term weak pattern, and keeps the short term of Zheng cotton and keeps the blank. The 1301 contract is empty single target 19400 yuan / ton line.