Cotton And Cotton Yarn First Booster Booster Is Not Xinjiang But The United States!

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Since 2018, Zheng cotton futures prices have continued to rise. In May, Zheng cotton prices further strengthened. In May 16th, the price of zhengmian 1901 was closed at 17050 yuan, up 4.03% on the day, up 13.57% from the low point of the beginning of the year (14445 yuan), and the positions and trading volume were significantly enlarged.

Today's trading again closed at 18555 yuan.

Recently, cotton in Xinjiang has been affected, especially in the northern Xinjiang. Large area of weather is not good enough, to a certain extent, the futures market is expected to rise in price.

However, it is reasonable to point out that this effect is magnified. From the exchanges between the institutions and the local grower and corps, the cotton disaster is not as serious as the market imagined. In the southern Xinjiang, Bazhou and Yili counties accounted for only 13% and 3% of the output, with limited impact.

However, the reduction of cotton production in the US and India has a great impact on prices.

For example, the output of Texas in the United States accounts for 40% of the US cotton output, and the reduction of cotton production in India will also lead to the whole body. Therefore, the ICE cotton price will be more determined by the USDA's expectation of output.

The key is coming!

The latest forecast report released by USDA5 showed that the global cotton supply and demand pattern will be tight. USDA expects cotton production in China, the United States and Australia to decline, and the US will drop more, mainly due to the drought in the southwest cotton area, resulting in higher rate of abandoned cultivation and less cotton production.

The report also pointed out that it is estimated that in the year 2018 and 19, the world's cotton output will be 26 million 386 thousand tons, down 1.03%, and the consumption of 27 million 311 thousand tons will increase by 3.74%, and the final inventory will be 18 million 233 thousand tons, with a decrease of 5.33%.

In the 2018 and 19 years, the global cotton supply and demand pattern has entered a tight trend. The inventory consumption is expected to drop by 6% to 67%. In the long run, favorable cotton prices will also have an impact on domestic cotton prices.

More than expected US cotton demand, fund long sought after

Sales figures are good.

The volume of shipment is also very high: as of April 26, 2018, the United States signed a net total of 3 million 726 thousand tons of cotton for 2017/18, with a shipment rate of 61.7% (2 million 300 thousand tons).

Among them, the signing amount of upland cotton is 3 million 593 thousand tons, and the shipping rate is 61.1%.

Signed 18/19 cotton 79.73, the new year's contract data for the same period last year was 524 thousand and 300 tons, the previous 3 years mean 28.85.

At present, the US cotton contract volume is very high, demand has already exceeded the expected market.

Moreover, the new year's contract volume is also very high, supporting the strong contract in the long term.

The only worry is shipment.

According to the current data, the next week's shipment needs to be completed at about 100 thousand tons.

The fund held more net positions for fourth consecutive weeks.

The proportion of long positions in funds has also risen to 45%.

Total positions increased for 10 consecutive weeks.

The July contract held at a high level of about 140 thousand hands (100 packets per hand).

The number of warehouse receipts was 1/4 in the same period last year (July was basically the same as last year).

According to the current contract volume, the amount of warehouse receipts will be limited, which will not be able to reach the peak of last year's registration (490897 packages).

Due to lack of water resources, India missed the best planting period.

The ideal sowing time in India so far has been over a week and only 76% of the cotton has been achieved in the state.

According to the weekly report of the Ministry of agriculture in May 22nd, the cotton planting area is 49 thousand and 700 hectares, with a target of 64 thousand and 800 hectares.

India agricultural experts suggest that cotton must be sown before May 15th to achieve maximum yield and reduce pests.

The lack of water in the cotton growing areas from the Bhakra canal system and the decline in production due to low prices this year are the cause of this phenomenon.

Two, the national cotton stocks fell to a foregone conclusion, cotton prices in the year to store up space!

The recent paction rate of state cotton has been significantly improved, and the reserve cotton 100% has been traded.

Volume and average price of national cotton reserves in 2018

In 2018, clothing consumption warmed, stimulating cotton demand, and domestic cotton planting area and production may decline year by year. In April 2018, China Cotton Association survey results estimated that the cotton planting area in 2018 was 42 million 175 thousand mu, down 4.43%.

The price of state cotton is usually lower than that of new cotton. The end of August will come to an end and new cotton will be on the market. In addition, some of the national cotton reserves, especially the real estate cotton, are of relatively poor quality and are difficult to meet the downstream production needs. Moreover, the national cotton reserves need to maintain a certain amount of safety reserves, and the replenishment of stocks is expected to gradually strengthen. Cotton textile enterprises are expected to raise their demand for national cotton reserves.

On the one hand, the State Cotton stores meet the gap between production and demand, and the inventory is further reduced.

In the future, there will be a demand for replenishment of national cotton reserves. If domestic acquisitions will increase the demand for cotton, if imported cotton will be imported from abroad, the cotton price will gradually rise.

Recently, cotton futures prices have risen, and the turnover rate of state-owned cotton stores has significantly improved. Investors and industry chain enterprises are expected to gradually increase their expectations.

Three, the cotton yarn industry has a high degree of prosperity, and promotes cotton demand to gradually improve.

Up to now, all A shares have been disclosed in the 2018 announcement, and the textile and apparel industry has risen more than 3.2% in the quarterly report, ranking the top ten in the A share industry, achieving a two consecutive quarter of growth and recovering in the two quarter.

The trend is good.

Domestic garment retail has been on the rebound since 2017, and 1-4 months in 2018.

Shoes and hats and knitwear retail sales increased by 9.7%, an increase of 2.6% over the same period last year, leading to the growth of demand for upstream cotton yarn and other textiles.

2018

Shoes and hat retail sales increased

2018Q1 China cotton yarn exports 445 million US dollars, an increase of 20.30%, the growth rate was significantly higher than the same period last year, the difference between domestic and foreign cotton prices continued to be low, and the competitiveness of domestic cotton yarn has been enhanced.

Domestic and foreign demand is picking up. Cotton yarn industry has entered the peak season. According to the research information of China cotton net and China Cotton Association in April 2018, cotton spinning enterprises such as Henan and Hubei in China mostly maintain full production, and yarn orders are in short supply.

Cotton yarn industry continues to grow, and cotton demand is good.

According to national cotton

Monitoring system data show that in April 2018 the national cotton industry inventory of about 843 thousand tons, a reduction of 18.8%, cotton inventories declined, 18 years in early April, cotton textile enterprises to buy Cotton accounted for 67.1%, the ratio increased by 0.9%, the demand for cotton gradually increased.

Four, which companies are the most benefited? The shorter the industrial chain, the more sensitive to the fluctuation of cotton price.

Cotton textile enterprises in China mostly use cost plus pricing, which is greatly affected by cotton prices, and usually reserves 3-4 months cotton inventory.

Cotton prices rise after cotton prices rise, lagging behind the low cost of cotton raw material reserves, leading to the increase of gross profit margin of cotton spinning enterprises. The shorter the industrial chain is, the greater the fluctuation elasticity of cotton prices will be.

At present, some domestic upstream textile leading companies are generally at a low level of valuation (more than 10-15 times PE in 2018), while the steady growth in performance and rising cotton prices will catalyze the performance and stock price performance of the cotton textile industry chain.