Cotton Slump Leads &Nbsp, Third Round Or Official Opening

In June 27th, the whole line was green, and cotton main contract led to a new low. The industry believes that today's cotton crash is affected by the tariff reduction of textile raw materials, or the beginning of the third round of collapse. The 1201 cotton contract will close to 19800 yuan / ton of storage and storage price, and the weak market shock will be maintained until the end of the year.

On the 27 day, the overall weakness of commodities was shocked and the whole industry was green. Day before yesterday Agricultural futures Most of the varieties fell by more than 1% on a daily basis, and 1201 of cotton's main contracts ranked first among commodities, with a unilateral drop of 1080 points, or 4.62%, at 22305 points.

Guotai Junan Futures analyst Zhou Xiaoqiu believes that this fall or related to a substantial reduction in the import tariff of blended fabrics.

On the 25 day, the Ministry of Finance announced that from July 1st, China will reduce the import tax on textile raw materials such as blended fabrics, including the blended fabric (after the import tariff adjustment was adjusted from 12% to 6%), linen yarns and other textile raw materials.

Zhou Xiaoqiu said that at present, because of the declining export situation, the domestic and downstream raw material inventory of the domestic cotton textile industry is huge and the cost is at a high level. Lowering tariffs has a psychological impact on the market and has depressed cotton prices.

For cotton market trend, Haitong futures Analyst Chen Dong believes that the rise of cotton last year is the result of three factors superimposed: more money, more demand, less supply, and this year the three factors have all reversed to three bad.

He said that the cotton fundamentals basically reversed from the beginning of this year, which also led to the reversal of cotton trend. The increase in supply expectation and interest rate increase led to the first wave of Cotton falling in February 4th; in March 31st, the second wave; the third wave fell; in fact, from May, the demand report began to increase the stock prediction of cotton has begun, and today's collapse is the official opening of the third round.

"In June 30th, the United States Department of agriculture will announce the actual cotton planting area, which means industry chain At this point in time, Zheng cotton will usher in the third round of decline. The cotton 1201 contract will fall below the previous low point and close to the 19800 yuan / ton purchase and storage price.

Chen Dong is not optimistic about the cotton market for the whole year, and believes that its weak pattern will remain in the second half of the year.

"In 7, 8 and September, the weather factor will become a hot spot for speculation. But in the face of weak demand and tight liquidity, cotton will remain low or volatile for 1109 or so until the end of its life."

He pointed out that the 1201 contract will have a certain rebound, but the increase in supply and weak demand will push the 1201 contract to bottom again after the new cotton market in October. However, because of the state's provisional reserve price of 19800, the 1201 contract will fluctuate to the center until 20000.