November 16, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] strong exports to boost U.S. cotton

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: relevant departments issued the "notice on the collection and storage of five cotton related matters". The announcement indicated that the quality standard of Shandong Binzhou, Dongying, Hebei Cangzhou, Hengshui, Tianjin and Jinghai five areas had been relaxed to 5 levels. From the understanding situation, the enthusiasm of cotton enterprises to store 5 grade cotton at present is not high, mainly because the acquisition cost is higher, plus a small number of movable sales in the market, the spot selling price is higher than the purchasing and storage price, most of the cotton enterprises choose to sell on the spot market.

3. imported cotton: the current spot market is bleak. On the one hand, cotton merchants buy the national cotton at a low price to control risks, but no one is willing to sell them. On the other hand, the few processing trade quotas used by the textile mills are used to purchase bonded cotton, and the number of orders for full customs clearance is also very limited. In addition, taking into account the quota policy and the market's expectation of dumping and storage, Cotton Traders dare not rush to put the cotton in the bonded area for consignment.

4. India cotton exports: the latest forecast of India Cotton Association (CAI) shows that the total supply of cotton in India is 7 million 89 thousand tons in, the demand is 4 million 522 thousand tons, and the ending inventory is 2 million 567 thousand tons, up three times compared with the same period last year. CAI asked the government to encourage exports, cancel the single registration export volume of not more than 170 thousand tons, and cancel the cotton export registration system.

5.ICE cotton: in November 15th, in spite of the widespread weakness in the commodity market and the unresolved American financial cliff, the US shares continued to fall, but the ICE period cotton was rising under the irritation of the empty return plate. The contract rose by nearly 100 points in March, which was due to the strong expectation of the market to postpone the number of American cotton exports published a day.

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 be stable for a long time". The May contract was strong at 19000 yuan / ton.

[MEIKO futures] cotton city face look at the country's storage period cotton steady

Overnight, ICE cotton prices hit a three week high on Thursday and the biggest one-day gain since four weeks, thanks to the unexpected buying of textile mills for quick delivery. ICE's most active December cotton futures settlement price rose 2.33 cents or 3.25%, at 73.96 cents a pound. Turnover is much higher than average. The period reached a high of 74.63 cents in the near settlement.

Industry news yesterday, the Department issued the "notice on the purchase and storage of five cotton related matters", Shandong Binzhou, Dongying, Hebei Cangzhou, Hengshui, Tianjin Jinghai five area quality standards to relax to 5 level, from the understanding of the situation, the current cotton enterprises to save 5 grade cotton enthusiasm is not high, mainly because the acquisition cost is higher, coupled with a small number of sales in the market, spot sales price is higher than the purchase price, most cotton enterprises choose to sell in the spot market.

In the international market, China's main port price of imported cotton generally rose on the 15 day, and the price of all varieties increased by 0.75 cents. Judging from the market situation, the recent fluctuations in cotton prices are more frequent, and the overall lack of sense of direction. It is understood that the current spot market has been dismal. On the one hand, cotton merchants bought the national cotton at a low price to control risks, but no one was willing to sell them. On the other hand, the few processing trade quotas used by the textile mills were used to purchase bonded cotton, and the number of orders for full customs clearance was also very limited. In addition, taking into account the quota policy and the expectation of the market for dumping and storage, Cotton Traders dare not rush to put the cotton in the bonded area for consignment. Generally speaking, traders are not having a good time, and they are unable to get the national cotton harvest and the embarrassment of foreign cotton is not too bold to touch.

The domestic market, 15, the domestic cotton spot prices showed a steady upward trend. At present, the smooth operation of China's national economy, the eighteen major successful convening, the overall economic upward possibility is greater, the new year's unlimited purchase and storage measures will absorb excess cotton, the role of policy support will contribute to the stability of cotton prices.

　　 successor prince Dynamic, in November 15th, the State Cotton temporary storage and storage of 48180 tons, as of that date, 2012 cotton temporary storage and storage transactions totaled 2451030 tons, of which 794110 tons in the mainland, and 1656920 tons in Xinjiang.

Spot quotation, November 15th C/A cotton 87.35 (cents / pound), discount general trade port delivery price 14829 yuan / ton (calculated by sliding tax); Australia cotton 92.35, discount general trade port delivery price 15455 yuan / ton; Uzbekistan cotton 90.35, discount general trade port delivery price 15200 yuan / ton; West Africa cotton 84.35, discount general trade port delivery price 14470 yuan / ton; India cotton 84.10, discount general trade port delivery price 14440 yuan / ton; CNCotton A 19676 yuan / ton, up to 19676 yuan; CNCotton B yuan yuan, rose 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. Near the US cotton 70, there is an opportunity to buy goods from China and usher in a rebound.

Operation, 05 pressure 19210-19270, support 18950, short-term operation. {page_break}

[one German futures] bottomed up, Zheng cotton short held more

Thursday CF1305 high concussion, CF1305 closed more than 7.5 million hands, a slight decrease in positions. CF1305 closed at 19175 yuan / ton, up 90 yuan / ton, reduced 6252 hand; in November 15th, China's imported cotton (FC Index M) 83.63 cents / pound, up 0.35 cents / pound, 1% yuan tariff reduced price 13463 yuan / ton, sliding price conversion price 14434 yuan / ton.

According to New York's November 15th news, the ICE cotton price hit a three week high on Thursday and the biggest one-day gain since four weeks, thanks to the unexpected buying of textile mills for quick delivery. ICE12 cotton futures settlement price rose 2.33 cents or 3.25%, at 73.96 cents per pound.

In November 15th, the cotton trading market in the national cotton trading market reached 11560 tons, an increase of 520 tons over the previous transaction, an order reduction of 800 tons and a total purchase of 55140 tons. 15 days to match the contract opened high, wide range of shocks within the day, the end of the basic small rise. Basically, the current us new cotton market is accelerating, and at the same time, because of the large and poor cotton prices, downstream demand and quota policy is unclear, textile enterprises are cautious to buy large scale purchases, so the market supply pressure will become apparent after receiving short term stock tension.

On Thursday, Zheng cotton was at a high concussion. The US cotton rebounded sharply yesterday. Recently, Zheng cotton was shaking at the bottom. With the acquisition and storage, the fundamentals were more stable. Today's operation suggests that short term multi single continued holdings, target 19250, CF1305 reference price range of 19100-19400.

[Wanda futures] multiple positive stimulation of Upland Cotton

On Thursday, investors recovered the global economic information, and the price of peripheral grain strengthened. At the same time, the registered cotton stocks rose to only 22887 packages (5190 tons), and the largest consumer country reached 2 million 580 thousand tons in China. The multiple positive factors stimulated the US cotton to continue upward. In December, the contract closed up 2.33 cents / pound, and the March contract rose 0.98 cents to 72.24 cents / pound. Short positions and consumer buying have become the main driving force for the rise of ICE cotton. However, the pressure from India and the US cotton market has gradually increased, and consumer buying from China is weak. Cotton prices do not have the basis for reversing the downtrend, and prudence on the rebound is appropriate.

On Thursday, ICE cotton fell to Zhongyang, and the main contract broke through the short term average in March. Although the average system maintained a good fall, the KD and MACD indexes were formed in the weak areas. The MACD index column will enter the strong area above the 0 axis, and the rebound power will increase. The March contract is expected to challenge the short-term pressure level of 74 cents / pound.

The Chinese government has decided to purchase and store 527 grade cotton at 17544 yuan / ton in the parts of Shandong, Hebei and Tianjin starting from 19. This may lead to a rise in the number of imported and storage stocks, and domestic resources will further tighten, and domestic spot cotton prices are expected to remain strong. However, the shortfall caused by the purchase and storage will depend on the issue of the additional quota and the dumping and storage. The market generally expects that the government will increase the quotas and throw stocks to ease the tension of market resources after the end of the purchase and storage in March. Cotton prices will face great downward pressure. And on Thursday, Zheng cotton only promoted slightly in the promotion of good margins and short positions, and the market did not get the initiative to buy support, so although Friday, Zheng cotton It is expected to follow the rise of US cotton, but it is difficult to change its long-term downtrend. It will continue to increase its 1305 contract by rebounding against 19400 yuan / tonne pressure level.