Chinese And Foreign Cotton Markets Still Lack Effective And Profitable Subjects.

Recently, after 2013-2015 years of intensive trading pressure, Zheng cotton's stock exchange increased its margin and commission fees, plus the cotton sale.

There was a pullback in the market pressure, to a rebound of 12000, but not to a big bang, and today it has seen a noticeably upward trend, showing the pressure on the market to continue to rise.

From the basic point of view, the Chinese and foreign cotton market still lacks effective and profitable subjects, the kinetic energy is still insufficient, the market rebound is bound, and no reduction can be held. If we fall below 12000, we will further explore and support investors in the 11500 and 10500 areas. The prudent investors who have closed up the empty space can pay more attention to the 12000 gateway guidelines for further operation.

Projected global 2016/17

At the end of the year, the inventory was 96 million 480 thousand packages, less than the estimated 102 million 840 thousand packages in 2015/16, and 102 million 220 thousand packages in April 2015/16.

On the whole, the report is not conducive to the old and stage market, but still has overall support for the new work and the whole market.

In May 3rd, cotton throwing and storage started, but not limited to 2 million tons. According to the demand, the weight of 50% of the cotton price within and outside the storage price was calculated. If only the reserves were considered, the amount of 2 million tons could meet the market demand for the rest of the market in the current year. With the current market volume of about 1 million 200 thousand tons, the total supply of about 3 million 200 thousand tons could basically meet the needs of 5 months before the cotton market, so if cotton is in demand, so if cotton is sold in the market, it will basically meet the needs of the 5 months before the listing.

There is no big problem. If the supply can be effectively supplied to the market, there will be no big problem in the overall market supply, and the volume of auctions from this time period is over 99%. The paction price in May 3rd is 12904 yuan / ton, and the paction price in May 17th is 12252 yuan / ton, which has a certain decline compared with the beginning of dumping.

On the one hand, it shows that there is a demand in the market at present. On the other hand, it shows that supply is effective. With the late dumping and storage, it will eventually suppress the market, block the rise of the market price and stabilize the price within a certain range.

The growth report released by the US Department of agriculture in May 17th showed that by the end of May 16th, the US cotton harvest rate was 40%, an increase of 14 percentage points over the same period last week, which is 1 percentage points higher than that in the same period of 5 years.

In addition, the US cotton export net sales of 103 million bales in 2015/16, increased by 69% over the previous week, an increase of 38% over the 4 week average, and a 3300 increase in cotton export sales in 2016/17.

Export sales figures are acceptable, but export shipment is not in progress. As of May 16th, the US cotton export shipment was 170 thousand tons, down 37% from the same period last week.

The exchange has made certain upgrades in the margin and handling fees to limit the overheated sentiment of the market. Since the settlement in April 26, 2016, the margin standard of cotton futures contract trading has been adjusted from 5% to 7%, and the price limit has been adjusted from 4% to 5%. Since April 27, 2016, the standard of cotton variety paction fee of Zhengzhou commodity exchange has been adjusted to 6 yuan / hand from 4.3 yuan / hand.

When the government throws the store near, plus the control of the exchange, the enthusiasm of the recent market will be suppressed. The bull is still aware of the current situation and has been cautious.

From the above aspects, we can see that at this stage, the cotton market lacks a lot of themes, and the market supply can be fully balanced. The price operation should also be defined in a relatively balanced operation. Combined with the trend of technology, Zheng cotton is expected to run between 10500-13500, which is relatively high in the current stage. So there is still room for short-term downfall. Although the recent rebound, the volume can not be combined enough, and the overall weakness has not changed.

The author's suggestions for phased operation are as follows: Zheng cotton is gradually involved in the empty list in more than 12500, while the 11500 is considering the gradual intervention of more than one single one, and the corresponding breakthrough is 13500 empty single stop loss, which falls below more than 10500 single stop loss.