The Long Staple Cotton Market Is Not Optimistic. Why Is The Price Down?

The near future

The trend is not satisfactory.

June 3rd

The mainstream quotation of 137, 237 and 337 grades of long staple cotton in Akesu market is 28000 yuan / ton, 27100 yuan / ton, 26200 yuan / ton respectively, all down 100-200 yuan / ton compared with May 29th.

According to the introduction of some cotton ginning plants in Awati County, the long staple cotton has just entered the substantive sales stage. The general mood of stock is urgent and the price is not stable, but the sales situation is not optimistic.

In the mainland market, long staple cotton is also facing challenges.

In June 3rd, a cotton trader in Ji'nan, Shandong said that the price of the 137 grade a Xinjiang production area was 28400-28500 yuan / ton, which basically fell back to the level in early May. The 237 and 337 level quotations were also in the 27300-27400 yuan / ton, 26400 yuan / ton line.

According to the cotton trader, there has been no marked acceleration in the long run out of the long staple cotton in the near future.

At present cotton merchants and

Brokers wait and see.

In Xinjiang, few cotton merchants have been asked for long staple cotton.

A Akesu market source said that the recent textile enterprises in Shandong, Jiangsu and Sichuan and Chongqing regions had reduced the number of inquiries and goods by at least 60% compared with the first half of May.

The long staple cotton market has been so cold and cheerless, which has led many market participants to decline in confidence, and it is estimated that the long staple cotton may enter a downward path in the near future.

There are also market participants who believe that the recent weakness, decline, or the accumulation of power for the latter part of the rise.

There are several reasons for the stagnation of long staple cotton in the near future. First, the banks have tightened the loan recently, and the psychological pressure of the cotton mill is heavy.

During this period, we often hear that the ginning factory intends to "dump goods" in order to repay the loan. To some extent, it brings instability to the long staple cotton market. Second, the recent electronic discs are not enough to cause instability.

Since the end of May, the CF1509 contract of Zheng cotton futures has been fluctuating at the level of 13000 yuan / ton, which gives the bullish people great psychological pressure.

Third, the expected yield increase of long staple cotton.

According to the data of Xinjiang's agricultural sector, the total output of long staple cotton in 2014 was around 70 thousand tons, and the area of long staple cotton increased by more than 30% over the past year. Even some market participants estimated that in 2015, the output of long staple cotton or 100 thousand tons in the first place reached a record output.

Fourth, some people are pessimistic that the price of combed high count yarn with long staple cotton as the main cotton will go down sharply.

This has given heavy weight to the long staple cotton market.

But optimistic market participants believe that the improvement of the long staple cotton market is a major trend.

First, there is a gap between supply and demand of long staple cotton.

With the late 2014/15 entry, the trend of long staple cotton concentrating on large cotton traders and multinational corporations is very obvious.

However, according to the survey data from these Cotton Traders and multinational companies, the commercial stocks of long staple cotton will not exceed 15 thousand tons at present. The new long staple cotton will be available at least 5 months from the next year. There will be a gap between supply and demand of long staple cotton during this period.

Second, the United States cotton and Australia cotton customs clearance is not large.

The total import of long staple cotton this year is not large enough to be negligible.

Australia's cotton output has dropped sharply this year, and port inventory is very low. Although the inventory of the US cotton Port Free Trade Zone and logistics area is relatively large, the volume of customs clearance is not large because of the tight quota of domestic textile enterprises.

Generally speaking, the supply and demand of long staple cotton is still tight this year, and the recent downgrades and callbacks are still accumulating power for the next rise.