October 31, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures]ICE cotton fell sharply

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

2. domestic stock: 30, domestic cotton spot prices continue to operate smoothly. Zheng cotton futures has been out of the weak market for the time being. However, textile enterprises are affected by factors such as insufficient demand, and price increases are lower than cotton. In addition, tight funds and difficulties in recruiting workers, most textile enterprises have small profits or even losses.

3. imported cotton: as the quota of textile mills is insufficient, the current cotton price level is not equal to the price of domestic Xinjiang cotton under the import of 40% full tariff, and the large number of imported cotton yarn imported from the textile factory alleviates the pressure of raw materials shortage. Therefore, it is difficult to increase the price of cotton prices too much.

4. new cotton storage and purchase: on the 30 day, the China cotton reserve management company plans to purchase and store 2012 tons of cotton for 137700 tons in October 30th, and the actual turnover is 75000 tons. As of October 30th, the total number of cotton temporary storage and storage transactions in the 2012 year was 1706920 tons, of which 454000 tons were traded in the mainland and 1252920 tons in Xinjiang.

5.ICE cotton: in October 30th, after ICE futures opened high, prices remained strong and broke 73 cents in the trading. However, due to the lack of upward momentum, with the fall of the 100 day average line, the sale of cotton prices springing up rapidly, and the cotton price in the late stage of the market dropped rapidly, and the contract fell by more than 2% in December.

Summary:

The current cotton price level is not equal to the price of domestic Xinjiang cotton under the 40% full tariff import, and there is no big advantage for the cotton price. China's cotton demand is weak and stocks are large. 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. ICE cotton fell or caused Zheng cotton to open low, but the author does not recommend short, but suggested that the opportunity to focus on important support positions, recently focused on support near 19500.

[MEIKO futures] India will not be optimistic about China's cotton market prospects.

Overnight, the price of ICE futures has remained strong after the opening of the futures market, and it has broken 73 cents in the trading. But due to the lack of upward momentum, with the fall of the 100 day moving average, the selling price has springing up. The cotton price has dropped rapidly in the late stage, and the contract fell by more than 2% in December. Cotton prices in the late stage of the decline has not been resisted, if there is no good news in the near future, cotton prices may fall below 70 cents.

On the news side, the India government plans to buy Cotton in 2012/13. India state enterprise India Cotton Corp (CCI) has drawn up a preliminary road map, which is about to buy 9 million bales of cotton from farmers in accordance with the benchmark price set by the state.

In the international market, on the 30 day, the price of imported cotton increased steadily, of which cotton cotton, Central Asia cotton and India cotton rose significantly, and West African cotton remained stable. At present, the US hurricanes are widely concerned by the market. If the heavy rain falls on cotton producing areas, the quality of new cotton will drop. In addition, the progress of India's new cotton listing is obviously lagging behind, which has become the main reason for the exporters to raise their quotations. On the whole, as the quota of textile mills is insufficient, the current cotton price level has no advantage over the 40% full tariff import and the price of domestic Xinjiang cotton. In addition, a large number of imported cotton yarn imported from Pakistan to alleviate the pressure on raw materials is not enough, so the price of cotton can hardly be increased too much.

Domestic market, 30 days, domestic cotton Spot prices continue to operate smoothly. Zheng cotton futures has been out of the weak market for the time being. However, textile enterprises are affected by factors such as insufficient demand, and price increases are lower than cotton. In addition, tight funds and difficulties in recruiting workers, most textile enterprises have small profits or even losses.

In October 30th, when the national cotton temporary purchase and storage business was 75000 tons, as of 30 days, 2012 cotton temporary storage and storage transactions totaled 1706920 tons, of which 454000 tons were traded in the mainland and 1252920 tons in Xinjiang.

Spot quotation, October 30th, the US C/A cotton 88.85 (cents / pound), discount general trade port delivery price 15125 yuan / ton (calculated by sliding tax); Australia cotton 94.35, discount general trade port delivery price 16261 yuan / ton; Uzbekistan cotton 91.10, discount general trade port delivery price 15413 yuan / ton; West Africa cotton 85.10, discount general trade port delivery price 14661 yuan / ton; India cotton 83.60, discount general trade port delivery price 14481 yuan / ton. The national cotton price A index is 19648 yuan / ton; the B index is 18793 yuan.

Market analysis, the recent market rumors continue to throw stores in November to alleviate the pressure of full tariff import, the India government is also ready to carry out the purchase and storage of cotton to ease the pressure of supply in the new year. Us hurricanes are approaching, and US stocks are closed for a long time. The impact of natural disasters on the economy remains to be seen. There is no stop signal in the 70 lines of the outside market. Zheng cotton is concerned about the breakthrough of the 19600 pressure, and the short term will also move upward.

Operation, the 19600 pressure breakthrough is the band empty single departure, heavy to rely on the integer gate missing opportunities.

[Wanda futures] under pressure of supply, US cotton continues to fall.

Hurricane Sandy attacked New York and New Jersey on Monday, while some traders took a vacation. Meanwhile, new cotton was on the market. Under the pressure of supply, ICE cotton continued to decline. The main contract in December fell 1.69 cents to 70.92 cents / pound, the lowest to 70.81 cents / pound. Although China's total reserves of the largest consumer countries have reached 1 million 707 thousand tons, but the supply pressure is increasing in the new cotton concentration market, while the consumption is still weak, the overall market will remain weak. The December contract will challenge 70 cents / pound strong support position. {page_break}

Tuesday ICE cotton fell again, the main contract in December is far from the suppression of short-term average, KD and MACD indicators continue to fall short, MACD index green column began to grow, the trend will continue, December contract will challenge 70 cents / pounds strong support position.

As of October 30th, China has seized 1 million 707 thousand tons of cotton, accounting for 83.51% of the 2 million 44 thousand and 100 tons of public inspection, far higher than the previous year. The market expects that this year's reserves will exceed 4 million tons. When the price of cotton is much lower than that of the purchase and storage price, the new cotton registered inventory will be in a low position, which increases the uncertainty of the 1305 contracts and becomes the main driving force for Zheng cotton's rebound. But domestic and foreign cotton prices remain high, Chinese products are not competitive in the international market, limited consumption is squeezed by imported cotton and cotton yarn, and domestic cotton is hard to get the favor of textile enterprises. At the same time, investors watched the market after the end of the purchase and storage. Zheng cotton The rebound is difficult to change the long-term weakness. It is expected to follow the US cotton fall on Wednesday, continue to hold 1305 contracts empty list, short-term target to 19200 yuan / ton line.