Mei Cotton: Signing The Export "Raging Fire" To Support ICE Cotton High Position

OPEC countries reached an agreement on crude oil production reduction at the Ministerial Conference in Vienna. The agreement is valid for 6 months.

Affected by this, CRB index rose 2.90%, commodities were boosted, ICE cotton contracts increased slightly oscillating, but from the increase and fundamentals, the ICE cotton main contract up the space and intensity is gradually reduced, testing 72.75 cents / pound and even 78 cents / pound increased the difficulty, in 67-73 cents / pound body body sideways probability is bigger, "falling deep, not rising", "top and bottom," is the main feature of short-term external market, then short-term support main contract 70 cents / pound above what are the factors?

First,

The marginal effect of the new monetary policy and Pakistan's opportunity to suspend the import of cotton from India to the US cotton export because of quarantine problems.

Due to the scrapped 500 or 1000 rupee banknotes in India, India cotton has been slow down from acquisition, processing and sales to 2016 in the 2016 year (some cotton areas dropped by more than 50% over the same period last year). At the end of November, nearly about 100000 tons of cotton export contracts could not be executed, and the buyers and sellers could only negotiate to postpone shipment or terminate the contract.

In order to protect the interests of farmers and reduce the dependence on India cotton (the political factor is also great), Pakistan will stop issuing India cotton import licences.

Two, the impact of external commodities on the trend of ICE cotton is very important.

On Wednesday (November 30th), the number of ADP employment, personal income and Chicago PMI was released in the United States.

Beautiful performance, and OPEC unexpectedly reached the first yield reduction agreement in 8 years, making oil prices soar 10%, supporting the US dollar index to nearly a week high. The US dollar and oil prices go hand in hand, and the pulling effect on commodities is prominent.

Goldman Sachs, Stanley and other investment institutions continue to look at the high US dollar index. They believe that the 120 index is not an obstacle to the US dollar, while cotton futures are more sensitive to the financial and metal levels. "Under the pressure, there will be no eggs." ICE cotton will still fly again with commodity futures.

Three, part of the cotton weather in the United States increased concerns, signing

"In full swing" to support ICE cotton high.

It is understood that the freezing rain and snow weather will enter Texas plateau and hilly areas this weekend. The weather forecast shows that the probability of precipitation in the Burke area will rise from 30% to 60% in the next 3 days. (by the end of November, the cotton seed picking process in Texas will be about 70%, but only 50% or 30% in the plateau and hilly areas).

According to USDA data, by the end of November 17th, the US cotton signed a total of 1 million 596 thousand and 800 tons in the year of 2016/17, of which the export volume of upland cotton has accounted for more than 60% of the forecast export volume this year. The enthusiasm of purchasing cotton and trading enterprises in Vietnam, Turkey, Mexico, Pakistan, China and other countries is still on the rise. The growth of 100-200% is widespread. The increase of cotton and cotton production, the increase in exports, and the quickening of progress, while the quality of cotton in India is good and cheap, but the performance is far from satisfactory.

Affected by Pakistan's policy of stopping imports of India cotton, India's cotton prices plummeted, and rupee continued to depreciate, and India's cotton yarn exports improved.

It is understood that after the abolition of some large bills in India, India cotton growers began to accept non cash payment to buy seed cotton.

With the increase of cotton supply in the spot market, cotton prices have dropped slightly, cotton yarn prices have been lowered, and cotton yarn exports are gradually increasing, especially for the Chinese market.

According to statistics, the average price of cotton yarn in India decreased by 1 rupees / kg last week, down 0.5%.

According to statistics from China Customs, the import volume of China's cotton yarn in India increased sharply in October 2016, especially in Qingdao port, and the import volume in November is expected to increase.

Influenced by the abolition of the TPP agreement, Vietnam no longer enjoys preferential tariff free entry into the US market, and does not have to comply with the TPP rules of origin. Therefore, Vietnam's imports of cotton and cotton yarn to India have increased.

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