Cotton Market Analysis Short Term Accumulation Of Difficulties

Increase in cotton industry stock

National cotton monitoring system data show that in November, the national cotton industry inventory was about 785 thousand tons, an increase of 4.2%, an increase of 25.6% over the previous year, which was only 4.2% less than the average inventory in the past three years. The cotton industry stock situation in the major provinces of the country was different. The inventory of cotton industry in Fujian, Jiangsu and Anhui was relatively large, with Jiangsu and Fujian as our country.

In the big industrial province, the increase in the stock of cotton industry at the present stage will also reduce its later purchase intention of cotton, thus forcing cotton prices to bear pressure.

In November, the average daily use of cotton in the sample enterprises was about 36 days (including the number of cotton imports to Hong Kong), an increase of 1.5 days, an increase of 7.5 days compared with that of the previous three years, an increase of 3.7 days compared with the average level of nearly three years.

Since January 2012, the average number of cotton stocks used by cotton mills in China has been on the average of nearly three years. In 4 to June, it has been decreasing, but it has been increasing since July. The number of days of inventory turnover has increased, and the number of future replenishment stocks may be reduced, which is not conducive to the stabilization of Zheng cotton.

The difference between inside and outside cotton price has expanded to 4000 yuan / ton again.

Recently, international cotton prices have been at a low level, and the price of China's main cotton port is once again on the verge of or below 15000 yuan / ton mark. At present, the price of cotton imports from the United States and India is at 15000 yuan / ton (according to the sliding tax rate, the same below), and Uzbekistan cotton is only slightly higher than 15000 yuan / ton.

The domestic cotton spot price stabilizes and rises slightly under the support of the purchasing and storage policy. At present, the current price of the 328 grade cotton is 18867 yuan / ton, up by 160 yuan / ton compared with the beginning of September, and the existence of a huge price difference of nearly 4000 yuan / ton between inside and outside cotton, or will restrict the domestic cotton price trend for a long time.

The purchase and storage policy made Zheng cotton strong and weak.

The total turnover of cotton temporary storage and storage in 2012 was about 2 million 585 thousand and 300 tons, and the turnover in the mainland was about 880 thousand and 600 tons, and the turnover in Xinjiang was 1 million 704 thousand and 700 tons.

Since the implementation of the new cotton purchase and storage, Zheng cotton 1301 contract has been relatively strong, while the 1305 contract is relatively weak. The difference between the former and the latter is also extended to about 650 yuan / ton. It is expected that the price difference between the two will continue to expand before the end of December.

Spin

Since the end of June, China's textile and apparel index has been on the downward side, and the index has reached a new low of 4419.75 and a half years since 21. It fell by nearly 1100 points, or more than 20%, in the middle of June.

In the case of textile and clothing index continued to decline and its prosperity index is still poor, Zheng cotton market may be under pressure.

Summary and operation suggestion

The demand for cotton is low, the supply surplus is aggravated, and the storage and supply of the market is held. Zheng cotton shows a weak trend in the cracks between the fundamentals and the policies. The future concerns closely about the quality of the "fiscal cliff" in the United States, the sustainability of China's economic data and the introduction of stable economic measures. This will be the focus of Zheng cotton's reversal of the decline.

The purchase and storage of the state made Zheng cotton strong and weak. On the 21 day, Zheng cotton's forward 1305 and 1309 contracts went down, and 1309 of the contracts fell below the 19000 point integer mark. This is the investor's concern about the future price of the cotton futures. If the economy is not getting better after the purchase and storage, the high inventory and the huge price of both inside and outside cotton will bear great pressure on the cotton market.

The holder may vacant or sell short in the forward contract.