Zheng Cotton Futures Price Adjustment Short-Term Market Is Not Optimistic.

Zheng cotton futures this week first suppressed after Yang, intraday fell below 12000 lines, then gradually picked up, recovered most of the decline, prices gradually stabilized.

On the spot side, China's cotton price index 3128B cotton newspaper rose 12523 points, rose 58 points, the spot index continued to rise, did not follow the decline of Zheng cotton futures and electronic matching prices, maintained relatively strong, the domestic market circulation of high-grade cotton resources were not large, and the number of surplus cotton within the territory decreased, according to statistics, Xinjiang cotton output in 2015 is estimated to be 3 million 669 thousand tons.

According to the calculation of pportation capacity, about 2 million 485 thousand and 500 tons of cotton have been exported, and the remaining 1 million 183 thousand and 500 tons are not out of the territory. The textile enterprises in the territory need to consume about 40-50 tons, and the remaining part is about 700 thousand tons, and another part of these 700 thousand tons belongs to the cotton which is not sold. So, Xinjiang cotton can sell less cotton in Xinjiang in the year of 2015/16. The resources are mainly concentrated in the corps and the large cotton enterprises. At present, the enterprises have plenty of funds and the pressure of repayment is not large.

Downstream market situation: Cotton after May

Orders entered the off-season, textile enterprises, garment factories, trading companies increased difficulty in receiving orders.

Sales slowed down, and yarn and cloth production capacity was too large. Downstream enterprises have gradually felt the pressure. Some textile enterprises' inventories have picked up. Some enterprises have gradually felt that it is difficult to digest the excessive bid price. With the increase in the volume of inputs, the intensity of replenishment will gradually decay, and the increase in paction price is expected to decline.

Overall, the situation of cotton reserves has been good this week, supporting cotton prices temporarily, and the spot price is in a relatively stable stage.

Weakness in the first three days of the week fell and rebounded on Thursday and Friday. However, the resilience was weak, which continued the previous week's downtrend for two consecutive weeks, showing signs of stabilizing prices. However, the overall weakness of the market was not reversed. The price of the contract in July was closely related to the 60 US branches.

This week, the downward trend of the previous two weeks lasted for three consecutive weeks. Although the fluctuation was larger, the decline slowed down compared with the first two weeks, and the price narrowed. The price of the 1609 month contract was adjusted around 12000.

The enthusiasm of the participants will be lowered, and the focus of the future price is expected to move down.

In terms of reserve cotton delivery: this week, the standard level cotton sales base price of reserve cotton was 11931 yuan per ton, 90 yuan per ton compared to the first week, the paction rate of national storage cotton was 149750.23 tons, the paction rate was 149750.23 tons, the paction rate was kept high, the average price was 12310 yuan / ton, the average price discount of the imported cotton was 14016 yuan / ton, the lowest was 13651 yuan / ton, the average price discount of domestic cotton was 12699 yuan / ton, the lowest was 12591 yuan / ton, the imported cotton was all sold, the domestic cotton had not a small deal, participated in bidders' enthusiasm.

Before the reserve cotton is put into operation, the downstream enterprises try to lower the raw material inventory, and the quality cotton is scarce in the market. It is difficult for the cotton market to purchase the cotton with suitable price and quality in the spot market. The national cotton stored in the market is better than the stock in terms of quality, foreign fiber and consistency, and has the advantage of net settlement and re inspection quality, especially the import is more favored by the market. Some traders are bidding for imported cotton and then sell it to small textile enterprises.

The situation of reserve cotton turnover shows that there is a real demand for replenishment in cotton enterprises, and the turnover is far beyond market expectations.