Cotton Prices Will Drop Sharply As National Cotton Reserves Are Increased.

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 throwing away the stored cotton.

By the end of May, 300 thousand tons of imported cotton had been put into operation.

Since June, the total amount of national cotton storage has been the volume of domestic cotton and national cotton reserves.

There are also some fluctuations, but turnover is still at a high level.

"At present, the supply of domestic stock is insufficient, especially the quality of Xinjiang cotton has a limited amount of spot circulation at a high price, but the short term terminal continues to focus on the purchase of national cotton reserves, although it is in the traditional off-season, but the high cost and limited spot resources also support the hard spot market.

As of June 21st, the accumulative total of cotton reserves totaled 925 thousand and 500 tons in 2015/2016, and 900 thousand and 200 tons of accumulated warehouses were sold, with a turnover rate of 97.27%.

Zheng Bo, an information analyst at Zhuo Chuang, said.

Zheng Bo believed that from participation

In terms of structure, traders' auction enthusiasm has been gradually warming up, and at present, the market circulation resources are mostly in the hands of traders. Traders provide for the textile enterprises to take photos, advance funds, pick up and pport, and the textile enterprises maintain normal delivery. However, the problem of price performance is insufficient, structural contradictions and slow storage are still remaining. Some textile enterprises are still in the "no rice pot" situation, which makes some spinning enterprises to buy cotton or long staple cotton outside the port.

Another hot spot in the recent market is cotton planting area and recent weather. Yang Zhijiang, general manager of Shanghai Century Boulevard, China Merchants futures, said that the recent high temperature and hail in Xinjiang affected the yield per unit area, and that the market funds were speculation. But the reduction in yield caused by the weather is expected to be relatively limited, and the output will not exceed 400 thousand tons, starting in March 1, 2017.

50 thousand tons / day, 400 thousand tons is also about 8 days of throwing reserves. If the current reduction is taken into account in the new year, the supply and demand pattern of the new year will not be affected at all. The overall supply and demand pattern in the new year is still empty.

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

In this regard, Gao Guoying, an analyst at new lake futures, said he did not agree. For the current main contract cotton prices should be dynamically looked at, first of all, in September, the contract price in the warehouse receipts and other topics hype, the price rise is larger.

The mainstream market price in Shandong is 12600-12800 yuan, while the 1609 contract price is about 13500 yuan. In September, the warehouse receipt was still the old warehouse receipt price. The January contract as the new year contract represents the new cotton price. That is to say, January is relatively undervalued in September, and the price is adjusted.

With the end of the import of cotton resources, the volume and paction price of national cotton stores began to fluctuate.

Analysts pointed out that before the launch of new cotton in September, under the tight market supply pattern, the national cotton reserve is still the main force to make up the market supply gap, and the State Cotton Storage will still be at a high level.

Since dumping is always a hot spot in the market, how much will be thrown aside will directly affect the supply of the market and cause the huge fluctuation of spot price.