November 15, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures]5 month contract is strong near 19000.

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

2. domestic spot: domestic cotton spot market prices rose slightly, the new year national storage and storage transactions speed and volume are significantly higher than last year, enterprises to actively store storage, mid November volume has reached 3 million tons, the state's unlimited purchase and storage decisions support the bottom of cotton prices, coupled with the state before the end of December, no quota, textile enterprises no cotton available, cotton market prices will continue to rise.

3. imported cotton: in November 14th, the price of China's main port of import cotton fell slightly, of which West Africa cotton and India cotton fell 0.5 cents, while the United States cotton fell 0.25 cents. It is understood that although the spot market is short of large orders, the inquiry and purchase of textile mills have not ceased. China's purchase and storage as well as the huge difference between inside and outside cotton prices are conducive to the entry of foreign cotton into the Chinese market.

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 14th, driven by the strong price of agricultural products, the ICE phase cotton rose all the way after opening, although the 71 cents in the plate were once lost, but the emergence of buying helped stimulate cotton prices to gain a foothold at 71 cents. At present, the market is still suppressed by macroeconomic uncertainty and adequate supply of resources, but the market is more stable in the support position of 70 cents, and cotton prices will continue to maintain a consolidation 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. The May contract was strong at 19000 yuan / ton.

[MEIKO futures] spreads to attract imports of cotton, Zheng cotton trend is weak

Overnight, driven by the strong price of agricultural products, the ICE cotton market went up all the way after opening, although the 71 cents in the market were lost, but the emergence of the buying price stimulated cotton prices to gain a foothold at 71 cents. At present, the market is still suppressed by macroeconomic uncertainty and adequate supply of resources, but the market is more stable in the support position of 70 cents, and cotton prices will continue to maintain a consolidation trend.

In the international market, China's main port price of imported cotton fell slightly on the 14 day, of which West Africa cotton and India cotton fell 0.5 cents, while the United States cotton fell 0.25 cents. It is understood that although the spot market is short of large orders, the inquiry and purchase of textile mills have not ceased. China's purchase and storage as well as the huge difference between inside and outside cotton prices are conducive to the entry of foreign cotton into the Chinese market. However, the reality of high global inventory is always putting pressure on the market. If there is no new news in the near future, cotton prices will maintain a weak consolidation pattern.

Domestic market, domestic cotton spot prices remained stable yesterday. The global economic growth is sluggish, and the overall supply of cotton is oversupplied. The cotton price center of gravity has shifted downward to a long-term trend. Domestic cotton downstream textile industry is facing greater business pressure, and the enthusiasm of increasing raw material inventory is not high. The rapid growth of foreign cotton yarn imports is still continuing to hedge domestic cotton consumption. Cotton demand is weak, and cotton prices are suppressed. At the same time, the cotton market is thrown out of storage and the import quota is also suspended.

State Reserve dynamics, November 14th countries cotton Temporary storage and storage of 47730 tons, as of that date, 2012 cotton temporary storage and storage transactions totaled 2402850 tons, of which 769930 tons in the mainland, and 1632920 tons in Xinjiang.

Spot quotation, November 14th, the US C/A cotton 86.60 (cents / pound), discount general trade port delivery price 14738 yuan / ton (calculated by sliding tax); Australia cotton 91.60, discount general trade port delivery price 15359 yuan / ton; Uzbekistan cotton 89.60, discount general trade port delivery price 15106 yuan / ton; West Africa cotton 83.60, discount general trade port delivery price 14382 yuan / ton; India cotton 83.35, discount general trade port delivery price 14353 yuan / ton. CNCotton A 19673 yuan / ton, up 2 yuan; CNCotton B 18827 yuan, up 8 yuan.

Market analysis, China's purchase and storage, as well as the huge difference between inside and outside cotton prices are conducive to the entry of foreign cotton into the Chinese market. The reality of high global inventory has always been a pressure on the market. Cotton price is hard to get rid of the weak pattern. Near the US cotton 70, there is a strong opportunity to buy goods from China, strong support; Zheng cotton's 01 average line is attached; 05 contracts are concerned about 18950 below. {page_break}

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

　 [one German futures] bottom shock Zheng cotton short more holding

On Wednesday, CF1305 was in a narrow concussion. CF1305 closed more than 5.1 million hands, and its position decreased slightly. CF1305 closed at 19120 yuan / ton, up 15 yuan / ton, reduced 2786 positions; in November 14th, China imported cotton (FC Index M) 83.28 cents / pound, fell 0.49 cents / pound, 1% yuan tariff reduced price 13407 yuan / ton, sliding price conversion price 14401 yuan / ton.

According to New York's November 14th news, the price of ICE cotton rose more than 1% to two week high on Wednesday. As other commodity prices rose, traders said that global demand levels and confidence in the economy will probably set the tone for the market. Cotton futures contracts in ICE12 rose 82 cents to 71.63 cents a pound.

In November 14th, the cotton trading market in the national cotton trading market reached 11040 tons, 70 tons less than the previous trading day, the order quantity reduced by 220 tons, and the total order 55940 tons. On the 14 day, the contract opened in the first half of the month and then plunged down. The rebound in the intraday rally was not big enough. It was difficult to change the trend of decline. The MA1301 contract went down in a high opening and a slight increase at the close. Spot sale price and purchase and storage price are double track operation, spot is difficult to be driven, and downstream consumption has no substantive good news, so the disk is still dominated by weak shocks. In recent two days, the price of cotton has fallen down, and the processing profit of cotton enterprises has been tested again.

On Wednesday, Zheng cotton had a narrow concussion, and the recent price shocks were at the bottom. With the acquisition and storage, the fundamentals were more stable. Today's operation suggests that yesterday's short term continued to hold more than one target, with a target price of 19250 and CF1305 reference price range of 19000-19300.

　 Wanda futures] China reserves 2 million 530 thousand degrees to support us cotton rebound

China has reached 2 million 530 thousand tons of storage, and its domestic spot cotton price has remained strong due to tight resources. Meanwhile, the rebound of soybean beans has provided confidence for the bull. Overnight, ICE cotton rose again under the support of speculation and consumer buying. The main contract in March rose 0.65 cents to 71.26 cents / pound. At present, the new US cotton market is speeding up, and the supply pressure is showing. However, China's import policy is not clear, consumer buying is hard to be stimulated, and the annual closing is near. The overall market is facing the problem of insufficient initiative buying. In this case, it is difficult for ICE cotton to get rid of the current weak pattern.

Wednesday ICE cotton Xiao Yang reported, the main force in March contract stable 70 cents / pound on the beginning of the challenge of short-term average suppression, although the average system has maintained a good drop in alignment, KD and MACD indicators continue to fall short of arrangement, but the two indicators in the overhang area has formed the trend of bonding, the MACD index green column shortening, the decline in kinetic energy is weakened, cautious down is appropriate, continue to pay attention to March contract 70 cents / pounds strong support position.

China's domestic and foreign cotton prices remain high, and exports and consumption of Chinese products are still weak. The downstream mills have limited affordability to raw materials, which inhibits the rise of cotton prices and the limited consumption is squeezed by imported cotton. On the other hand, domestic enterprises and investors are not optimistic about the market after the purchase and storage. After March, the issuance of quotas and storage are expected to suppress the popularity of the market. The 1305 contract is hard to get the support of capital and popularity. Zheng cotton It is expected to follow the US cotton rebound, but it is difficult to change the long-term downtrend. It will continue to hold 1305 empty contracts and pay close attention to the strong support position of the 1305 contract of 19000 yuan / ton.