Throwing Store Will Prolong The Hot Cotton Market Immediately Into Ice And Snow.

Looking back on the whole July, the resonance between the international and domestic cotton markets was strong.

Zheng Mian first pulled up, while the ICE cotton was more reserved. At the beginning of the month, it lingered for 65-66 cents. The USDA supply and demand report was as good as a fuse, igniting the ICE phase of the small universe at once. It broke through the previous concussion for a long time on the two day, breaking the previous trend of concussion for a long time. At the end of the month, it remained at 74 cents line.

Zheng cotton, the forerunner of this round of growth, leaps directly from the fourteen thousand pass to sixteen thousand, but it does not last long. At the end of the month, rumor has it that the dumping will extend for a month to September 30th, hot.

Immediately plunged into ice and snow, for two consecutive days to limit, to 14500 yuan / ton line.

Cotton market in the United States: in the year of 16/17, the output of US cotton increased by 640 thousand tons compared with the current year, and the output was estimated at about 3 million 440 thousand tons. Fortunately, USDA increased the export volume to 2 million 500 thousand tons in the next year.

In July, the growth rate of new cotton increased significantly, but the excellent and good rate decreased slightly.

On the export side, the task has been over fulfilled this year, and the shipment speed has been speeded up, but it is still slightly slower than in previous years.

India Cotton City: in 16/17, the estimated output of USDA is about 5 million 990 thousand tons, although in the near future

Cotton growers are expected to pick up in replanting cotton (15035, 160, 1.08%), but from the current situation, this can not make up for the impact of earlier pests.

Cotton prices continued to rise rapidly in India in July, with a slight decline from up to 92 cents, and the latest price of S-6 ginning factory was 47250 rupees / 89.5.

The reason for the fall in cotton prices is mainly due to increased rainfall, planting area is expected to rise, and the recent large-scale.

The procurement of foreign cotton increased.

Domestic cotton Market: domestic cotton output in 16/17 is expected to be around 4 million 500 thousand tons, but due to frequent rainstorms in the mainland in the past two months, domestic production still has room for reduction.

There is not much change in imports, and it is believed that this year will maintain a low level (not more than 1 million tons).

In terms of reserve cotton delivery, in July, with the strong demand from downstream textile enterprises to increase the quantity of inputs, the output of cotton reserves rose more than in June, but the government failed to fully fulfill the promise of 3-5 tons per day.

Almost daily turnover was maintained at 100% in that month, and the average price of the paction jumped to 13000 yuan / ton from the beginning of the month to 15500 yuan / ton.

At the end of the month, the relevant news said that the cotton reserve will be extended to September 30th, increasing the delivery time for one month, and the market atmosphere will change immediately, and the average price will drop to 14500 yuan / ton line.

We estimate that the reserve will be supplied for 202-222 tons in four months this year, and the remaining market volume will be 80-120 tons at the end of the year.

The dumping and storage will extend to the end of September, which will increase the supply of 40-60 tons per month or 242-282 tons in 2016.

The consumption of the lower reaches is estimated at 55-60 tons / month, and there is no theme that can be hyped. The focus of the market is still on the supply side.

Conclusion: in August, when the news of dumping and storage postponed for one month, the short term domestic cotton market will maintain a weak pattern. However, we believe that the downlink space is also limited, and the latter will enter the concussion period smoothly and move smoothly to the new year.

From the international point of view, at the end of the year, there is no new supply of cotton and India cotton, and the price of cotton and outer yarns will be relatively strong, which will form a support for China.

From the domestic point of view, the panic in the downstream can be relieved by the delay in dumping and storage. In July, the high turnover rate of nearly 100% of the reserves will decline or the monthly output of the cotton reserves will decrease.

We made an extreme contrast. We did not postpone the turnover of 600 thousand tons in August, postponed 8 and 9 for two months and maintained 400 thousand tons / month. The total supply actually increased by only 200 thousand tons, and the impact was very weak.

Therefore, we believe that despite the bad policy, the market is hard to fall.