November 19, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] domestic spot price edged up slightly

Main points

1. Price Bulletin: domestic lint: 129 level 20552 yuan / ton; 229 level 19680 yuan / ton; 328 level 18837 yuan / ton; 428 grade 18050 yuan / ton. domestic Spin Product: polyester staple fiber 10320 yuan / ton; viscose staple fiber 14460 yuan / ton; C32S price 25770 yuan / ton.

2. domestic spot: at present, the enthusiasm of the five related cotton enterprises to store and store 5 grade cotton is not high, mainly because the acquisition cost is relatively high, plus a small number of movable sales in the market, the spot selling price is higher than the purchasing and storage price, and 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.

4. seed cotton purchase: on the 9-15 th of November, the main cotton producing areas in China turned cold, the quality of seed cotton decreased, and the seed cotton purchase price was higher and lower, and there was no significant oscillation. Cotton farmers' selling mentality was slightly reduced, and the selling psychology of selling prices gradually dominated. However, the processing of lint in cotton ginning plants is mainly for storage, and the quality requirements for seed cotton are still high, while the price of cottonseed presents a downward trend, which further limits the enthusiasm of the enterprises to purchase, and the overall purchase and sale of the market is stable.

5.ICE cotton: in November 16th, the United States encouraged investors on the good news of the financial cliff negotiations. The US stock market stopped rising, but worries about the economic outlook could not be completely eliminated, and the commodity market was mixed. ICE cotton market in a large oscillation last week, cotton export contract volume of nearly 90 thousand tons to stimulate cotton prices rose, March contract settlement price exceeded the 40 day moving average.

Summary:

Although the USDA's bad report continues to put pressure on the fundamentals, the demand for cotton prices at 70 cents is obvious, and the support for the market is strong. However, it is difficult to sustain the increase under the pressure of supply. 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 decides that the futures price has lost the buying power from the spot business. However, under the influence of purchasing and storage, the average price of domestic spot has been rising slowly. We must stick to the idea that China's cotton prices will run steadily for a long time in the period of storage and withdrawal. We should pay full attention to the policy of purchasing and storage, and insist on the idea of doing more bargain. The May contract was strong at 19000 yuan / ton.

[MEIKO futures] price structure brings import pressure, sluggish consumption, still dragging cotton prices back leg

Overnight, on the 16 day, the United States encouraged investors on the good news of the financial cliff negotiations. The US stock market stopped rising, but worries about the economic outlook could not be completely eliminated, and the commodity market was mixed. ICE cotton market in a large oscillation last week, cotton export contract volume of nearly 90 thousand tons to stimulate cotton prices rose, March contract settlement price exceeded the 40 day moving average. Although the downstream demand has eased up, the pressure of oversupply has been alleviated, but this situation is very difficult to sustain, and cotton prices are difficult to get more room for growth.

Industry news, the United States Department of Agriculture announced the 2-8 US cotton export report on November 2012. In the week of 2012/13, the net volume of US cotton exports reached 83 thousand and 900 tons, up 39% from the previous week. The export volume of us upland cotton exports is 24 thousand and 100 tons, a decrease of 8% over the previous week, an increase of 15% over the previous 4 weeks.

In the international market, on the 16 day, the price of China's main port of imported cotton rose again, and other varieties increased by 1 cents, except for Egypt's long staple cotton and American Pima cotton quotations remained stable. Since the market volume is not large enough, the rising price of cotton will further inhibit spot demand. On the whole, the price of cotton has been up and down in recent years, but under the condition of abundant resources, there is no foundation for the rise. Once the demand is out of the textile mill, cotton prices will fall back.

Domestic market, 16, the domestic cotton spot price is still showing a steady upward trend. Due to the low external demand, high cotton prices and continuous cost increase, the textile industry is still grim. Exports from 9 to October have entered a positive growth state. However, due to the further spread of cotton prices at home and abroad, the cotton textile industry and the chemical fiber industry will be in a more difficult situation for some time.

In November 16th, the national cotton temporary storage and storage business reached 39060 tons. As of that date, 2012 cotton temporary storage and storage transactions totaled 2490090 tons in 2012, including 818170 tons in the mainland and 1671920 tons in Xinjiang.

Spot quotation, November 16th, the US C/A cotton 88.35 (cents / pound), discount general trade port delivery price 14951 yuan / ton (calculated by sliding tax); Australia cotton 93.35, discount general trade port delivery price 15584 yuan / ton; Uzbekistan cotton 91.35, discount general trade port delivery price 15327 yuan / ton; West Africa cotton 85.35, discount general trade port delivery price 14588 yuan / ton; India cotton 85.10, discount general trade port delivery price 14558 yuan / ton. CNCotton A 19680 yuan / ton, up 4 yuan; B index CNCotton B 18837 yuan, up 4 yuan. {page_break}

Market analysis, storage and storage accumulated 2 million 500 thousand tons, but as the consumption continues to shrink, the huge difference between inside and outside cotton prices is conducive to the entry of foreign cotton into China, and the situation of oversupply in the market is hard to change in the short term. Near the US cotton 70, there is a buying opportunity from China to drive up the price rebound, and the 75 line of pressure is highlighted.

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

　 [Wanda futures] U.S. cotton exports to stimulate ICE cotton continued rebound pattern

Although the December contract rebounded on Thursday as a result of the decline in textile business buying, the export weekly report released on Friday showed that as of the 8 week, the US cotton export contract reached 84 thousand tons in the current year, and 70 cents / pound of the first line consumer purchase was stimulated. The purchase and replacement of the cotton mill made the forward contract strong, and the contract closed 0.4 cents to 72.64 cents / pound in March. However, China's buying has not been aroused. The US and India's new cotton are listed, and the supply pressure continues to increase. Before the fund's buying is not stimulated, we should not take a look at the rebound and take a cautious view of the rebound.

Friday ICE cotton Xiao Yang closed, the main contract in March stabilized short term average line, although the average system has maintained a good fall in the arrangement, but the short-term average has a U-turn upward trend, KD and MACD indicators in the overhang area to form a long gold fork arrangement, MACD index red column continues to grow, cotton prices become stronger, rebound may continue, pay attention to March contract 74 cents / pound line pressure level and 70 cents / pounds strong support position.

On Friday, Zheng cotton went up and down, but the main contract in May still failed to stand on top of 19200 yuan / ton. As of November 17th, China accumulated 3 million 310 thousand tons of cotton for public inspection, accumulative total of 2 million 850 thousand tons, and spot cotton prices therefore maintained a tight pattern. But domestic and foreign cotton prices remain high, and China's exports and consumption remain weak. Business capital is tight. Some factories will postpone the start of the Spring Festival ahead of schedule, and the probability of replenishment before the festival is not high. And cheap imported cotton will continue to impact on the domestic cotton market. Zheng cotton is hard to get support for consumption and speculative buying. The long term weakness will continue, and it will continue to hold empty contracts for May, but if the 1305 contract breaks through 19200 yuan / ton pressure, Cotton price Up to 19400 yuan / ton in the increase in the empty list is appropriate.