The Cotton Market Is Driven By The Improvement Of Supply And Demand Fundamentals.

At present, the cotton business inventory is relatively low, and the cotton price is rising. At present, we need to pay attention to whether the downstream mills can bear the pressure brought by the rising cotton prices.

The depth of the off-season, but we should also consider the hype between the weather and the specific impact on the output.

And the driving force of the peak consumption season in September.

At present, Zheng cotton warehouse receipt is close to 40 thousand tons. If the current price is too large, there will be more cash in delivery.

In the second quarter of this year, cotton futures prices in Zhengzhou increased by nearly 50%.

Data show that as of June 30th, cotton futures 1701 main contract closed at 14725 yuan per ton.

Industry analysts said that the rapid rise in cotton prices, on the one hand, the national cotton planting area decreased by 10% in 2016, this year

Output is expected to be substantially reduced, on the other hand, driven by the depreciation of the RMB, the textile industry's export rebound is expected to bring strong boost to the upstream cotton industry, which makes the cotton market driven by the improvement of supply and demand fundamentals.

It is understood that from 2014

Cotton production will begin to decline after the end of the year. Due to natural disasters, the output of cotton will probably be only 4 million 300 thousand tons to 4 million 500 thousand tons this year.

From the point of view of imports, from the end of the end of 2014, the state began to control the import volume, mainly to reduce the issuance of import quotas.

The monthly import volume reached a historic low this year.

Prior to this, the market is generally expected to start throwing cotton reserves in March.

Insiders said that if the stock was sold in March, the market may still fall, and the market price of cotton might be lower than the selling price.

Because last year was a similar situation. In July last year, 1 million tons of reserves were sold and about 63 thousand tons were actually traded.

But in fact, the delay in May was much higher than market expectations, and the consumption of commercial inventories increased during the two months.

Another hot spot in the recent market is cotton planting area and recent weather.

Related monitoring data showed that in 2016, the cotton planting area decreased significantly, and the national reduction rate reached 14.3%. In addition to the area outside Xinjiang, the reduction was generally over 20%. Due to the large subsidies and the target price of 18600 yuan / ton, Xinjiang's sown area decreased by 6.3%.

Without considering the impact of national cotton reserves, the supply of cotton will be in short supply in 2016, which will form a certain support for cotton prices.

In addition, the recent high temperature and hail in Xinjiang affected the yield per unit area, and the market funds were speculation. However, the market predicted that the reduction in the yield caused by the weather is expected to be relatively limited, and the output will not exceed 400 thousand tons. In March 1, 2017, it will start dumping, 50 thousand tons / day, and 400 thousand tons, or about 8 days.

Therefore, the price of hype caused by speculation is very limited.

However, faced with the current trend of cotton prices, the market is also divided. Some people believe that the reason why domestic cotton is rising now has a certain relationship with the rhythm of national cotton throwing and storing.

As long as national cotton reserves are being increased, cotton prices will drop sharply.

In response, some analysts said that for the current main contract cotton prices should be dynamically looked at, first of all, in September contract prices in the warehouse receipts and other topics of speculation, the price of a larger increase.

It is worth noting that the current procurement of cotton textile enterprises active, textile enterprises raw material inventory is still relatively low, in order to maintain production, we need to continue to replenish inventory, but the spot market lack of cotton resources, textile enterprises to store more cotton reserves to replenish inventory, enterprises actively auction.

Analysts said that cotton prices continued to be strong, throwing and storing slowly, and prices remained high, giving rise to positive feedback from the market. Foreign cotton sources were tight. During the growing season, the weather was easy to lift. In this case, the cotton theme was still positive, and with capital push, the market was still running well, but after continuous upgrading, there was need for consolidation.