November 14, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] demand for us cotton at 70 cents is obvious.

Main points

1. Price Bulletin: domestic lint: 129 level 20535 yuan / ton; 229 level 19661 yuan / ton; 328 level 18807 yuan / ton; 428 grade 18002 yuan / ton.

domestic

Product: polyester staple fiber 10400 yuan / ton; viscose staple fiber 14410 yuan / ton; C32S price 25790 yuan / ton.

2. domestic spot: 12, the domestic cotton spot market prices rose slightly, the new year's national acquisition and storage paction speed and volume are significantly higher than last year, the enterprise storage storage positive, mid November volume has reached 3 million tons, the state's unlimited purchase and storage decision support the bottom of cotton price, plus the state before the end of December, no quota, textile enterprises have no cotton available, the cotton market price will continue to rise.

3. import cotton: US cotton export weekly report shows that although the USDA's bearish report continues to put pressure on the fundamentals, the demand for cotton price at 70 cents is obvious. Huge internal and external spreads have created conditions for many textile enterprises to pay full tariffs for the purchase of foreign cotton. At present, foreign bonded cotton quotations are rare.

Under the support of China's unlimited storage, the price of outer cotton will remain stable.

4.USDA11 month report: global cotton production increased by 111 thousand tons in 2012/12, including countries such as Uzbekistan and the United States. The consumption volume was reduced by 118 thousand tons, of which China reduced by 109 thousand tons; trade volume consumption increased, and final inventory increased by 17 million 477 thousand tons, increasing by 253 thousand tons.

5.ICE cotton: in November 13th, ICE phase cotton was low and low, and the March contract was mainly oscillated in the 70 cent area.

In addition to grain futures dragging down cotton prices, with the accelerated pace of US cotton harvest, delivery inventory is also gradually increasing, bringing downward pressure on the market.

At present, the US fiscal cliff affects the market nerves, and the negative sentiment of investors will dominate the recent market trend.

Summary:

Although the USDA's bad report continues to put pressure on the fundamentals, the demand for cotton prices at 70 cents is obvious.

Zheng cotton aspect, from the current structure, when the price of Zheng cotton is higher than the cotton price of social circulation, the cotton buying enterprise has no power to choose futures purchase channel.

This determines that futures prices lose the buying power from spot enterprises.

During the period of storage and purchase, we insist that the "cotton prices in China will run steadily for a long time". We must pay close attention to the policy of purchasing and storing in operation, and focus on the idea of doing more bargain.

[one German futures] bottom shock Zheng cotton selection machine short

On Tuesday, CF1305 was in a narrow concussion. CF1305 closed more than 2.6 million hands, and its position decreased slightly.

CF1305 closed at 19095 yuan / ton, up 20 yuan / ton, reduced 1262 hand; in November 13th, China's imported cotton (FC Index M) 83.77 cents / pound, up 0.43 cents / pound, 1% yuan tariff reduced price 13485 yuan / ton, sliding price conversion price 14458 yuan / ton.

According to New York's November 13th news, the ICE cotton prices fell on Tuesday, prompting a slight breather after investors recorded yesterday's biggest one-day gain in nearly a month due to weak grain market performance.

Cotton futures in ICE12 fell within a narrow range, closing 7 cents at 70.81 cents a pound.

In November 13th, the cotton trading market in the national cotton trading market reached 11110 tons, 160 tons less than the previous trading day, the order quantity reduced by 300 tons, and the total order 56160 tons.

On the 13 day, the contract was opened up, and within a wide range of days, it finally rose.

On the basis of fundamentals, the volume of cotton exports outside the port has increased recently, and some textile enterprises have chosen to purchase Chen cotton. However, the overall operation of textile enterprises has not improved, and the sales of yarn products are not smooth. The inventory management is still the focus of textile enterprises. Procurement is only limited to recent demand or due to the expiration of quotas. It is difficult to form large-scale purchases, only to improve the market in a short time, and it is difficult to fundamentally change the market before the downstream improvement.

On Tuesday, Zheng cotton narrowly concussion, the recent price in the bottom of the shock, the 2 test before the low failure all received a long shadow line, relying on the bottom 19000 support, you can choose more short, the resistance is out, with the purchase and storage of the fundamentals are more stable.

Today's operation suggests that depending on the 19000 support, you can choose more machines, and the CF1305 reference price range is 19000-19300.

[MEIKO futures] once again attracted full tariff import.

Overnight, ICE

Low and low, the March contract was mainly oscillated in the 70 cent area.

In addition to grain futures dragging down cotton prices, with the accelerated pace of US cotton harvest, delivery inventory is also gradually increasing, bringing downward pressure on the market.

At present, the US fiscal cliff affects the market nerves, and the negative sentiment of investors will dominate the recent market trend.

On the international market, the price of China's main cotton imports rose 13, while the US cotton and Australia cotton rose 0.75 cents, while West African cotton and India cotton rose 0.5 cents.

With a large number of national cotton entering the reserve bank, the low grade cotton, which is cheap and pays the full tariff of imported cotton, is still cheaper than domestic Xinjiang cotton, which is favored by textile mills.

As the textile mills close to the end of the year, for fear that the policy will change, avoid bonded cotton that can be directly picked up, or cotton that can be delivered to the port before the end of the year.

Generally speaking, as long as the price of cotton is suitable, textile mills will not stop purchasing, so the price of foreign cotton is difficult to fall sharply.

Domestic market, 13, the domestic cotton spot market price is still stable small rise.

Under the influence of the global textile consumption downturn, the downstream market is still hard to recover, and volume is difficult to guarantee. Textile enterprises will face double difficulties in sales and capital turnover.

In November 13th, the national cotton temporary storage and storage business reached 58770 tons. As of that date, 2012 cotton temporary storage and storage pactions totaled 2355120 tons in 2012, including 746200 tons in the mainland and 1608920 tons in Xinjiang.

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Spot quotation, November 13th, the US C/A cotton 86.85 (cents / pound), discount general trade port delivery price 14768 yuan / ton (calculated by sliding tax); Australia cotton 90.10, discount general trade port delivery price 15455 yuan / ton; Uzbekistan cotton 89.35, discount general trade port delivery price 15169 yuan / ton; West Africa cotton 83.35, discount general trade port delivery price 14353 yuan / ton; India cotton 84.10, discount general trade port delivery price 14440 yuan / ton.

CNCotton A 19671 yuan / ton, up 3 yuan; CNCotton B 18819 yuan, up 3 yuan.

Market analysis, the spot market remained stable. Due to the high price of quotas, many enterprises chose to purchase cotton directly from 40% tariffs. Even so, the price still has an advantage over real estate cotton, and a large number of new cotton stocks have been listed. Although the country has a large number of pactions, the spot market pressure is still there.

Mei cotton 70 has the opportunity to buy goods from China, so it has strong support; zhengmian 01 average line is attached; 05 contract pays attention to 18950 below.

On the operation, 01 wait-and-see, 05 contract 18950, if a drop can be a small test.

[Wanda futures] under the pressure of supply ICE cotton to maintain a weak pattern

ICE cotton rose on Monday and did not get the response from the Chinese market. Meanwhile, prices of international agricultural products were mixed overnight. ICE cotton stocks continued to increase, and the market did not follow up buying support. In March, the contract fell 0.59 cents to 70.61 cents / pounds.

November coincided with the massive listing of new cotton in the US and India, and the pressure of supply increased. The fund purchase was tied to the December contract. China's buying was constrained by the policy, and the short-term market was hard to get the support of capital and popularity. The weakness will continue, and the March contract will continue to challenge the 70 cent / pound integer support position.

Tuesday ICE cotton Xiao Yin closed, the main contract in March, although stable 70 cents / pound, but subject to short-term average suppression, the average system maintained a good fall in the arrangement, KD and MACD indicators continue to fall short, MACD index green column running smoothly, cotton prices are still in a downward trend, March contract will continue to challenge 70 cents / pounds strong support.

Although China's purchasing and storage has led to tight domestic cotton, especially high-grade resources, because of the high domestic and foreign cotton prices, China's exports and consumption have no signs of improvement. Textile enterprises have limited affordability to raw materials, and limited consumption has shifted to the import cotton market.

On the other hand, close to the year, most enterprises have tight funds. The high price of zhengmian and domestic cotton is difficult to attract textile companies to buy.

At the same time, the market generally believes that the Chinese government will issue additional quotas and throw reserves to ease the resource shortage caused by a large number of storage and purchase in March.

It is difficult to get support from consumption and speculative buying. Under such circumstances, the cotton price will maintain a downward trend in the future. We will not keep up the idea of Zheng cotton. We will continue to hold 1305 empty contracts and pay close attention to the strong support position of the 1305 contract of 19000 yuan / ton.