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Cotton Shortage Rising Factor &Nbsp; Close To The Reserve Price 19800.

2011/7/19 16:29:00 32

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Cotton And Cotton Export To Domestic Cotton

Recently, Zheng cotton's main contract CF1201 has been temporarily supported near 21000, and there is a need for technology rebound in the short term. However, the author believes that because of the lack of support factors for the fundamentals, it is still difficult for cotton to get rid of the fall in the medium and long term.

Large enterprises continue to sharply reduce the purchase price

The spot market has entered a low selling stage, and some of them have been hoarding.

Cotton enterprises

Industry is affected by various factors such as agricultural development bank loan, new flower listing and other concerns about price continued to fall, and began to reduce sales. A large textile enterprise in Shandong has recently substantially lowered its quotes for 4 grade cotton.

As of 15 days, Wei Qiao textile has cut down 4 grade lint purchase price several times in half a month. At present, the 429 level price is 19500 yuan / ton.

This month, the company has lowered the purchase price of 4 grade lint 3200 yuan / ton. It is expected that the spot price of cotton will continue to weaken in the future.

Central bank tightening policy unchanged

June national residents

Consumption price

The total level (CPI) increased by 6.4% compared with the same period last year, or a 3 year high.

To this end, the central bank announced two days ahead of the announcement that the deposit and loan interest rate will be raised by 25 basis points since July 7th, the third increase in interest rates during the year, indicating that the tight tone has not been changed.

As the interest rate increase will aggravate the tension of capital chain in some industries, especially in the textile industry, the probability of cotton price rise will be greatly reduced.

In July 7th, the ECB Executive Committee's monthly meeting decided to raise the benchmark interest rate by 25 basis points, from 1.25% to 1.5%.

Cotton grows well in the new year.

According to the weighted average calculation of cotton planting area of cotton farmers surveyed by China Cotton Association, the cotton planting area in 2011 is estimated to be 81 million mu, which is 5.2% higher than that in the previous year.

The national cotton market monitoring system conducted a nationwide cotton growth survey from 17 to 30 June 2011. Since June, the main cotton producing areas in China are basically normal, with a slight occurrence of pests and diseases, and the picking period is expected to be in the normal range.

If the weather is normal in the late period, it is estimated that the new cotton output will be increased by 93.06 kg / mu, 9.29% higher than the previous year, and the total output of cotton is expected to be 7 million 390 thousand and 200 tons, a significant increase over the previous year.

USD report data holistic

Last Tuesday, the US Department of Agriculture released the world.

Supply and demand of cotton

The report lowered the cotton consumption and trade volume this year, and raised the total output and final inventory. The report also lowered the output and export volume of the US cotton in the next year, and the data of China's imports also dropped sharply.

On the 14 day, the US Department of agriculture's cotton export report also showed that the number of textile mills canceled more than the new contract volume, resulting in the 2010/2011 -2.07 net export volume of -2.07 cotton, and China cancelled 9 thousand tons. This is a phenomenon that net contracts have been negative for more than ten weeks since the end of last decade.

Signs of deterioration in the global economy

When the Greek problem just got better, Moodie Investors Service Inc lowered Portugal's long term sovereign debt rating from BAA1 to BA2 on the 6 day, that is, garbage rating. Portugal's sovereign rating outlook was negative. At the same time, on the 13 day, the rating of us AAA's government bonds would be included in the negative watch list, resulting in the possibility of US Treasuries breaking up.

All these indicate that the global economy is showing signs of deterioration, and that the late global economic development is worrying.

In short, due to the significant increase in cotton production area and the continued downturn in downstream demand, the domestic tightening policy will not change. The cotton prices will continue to fall in the future market, and will gradually move closer to the 19800 of the new year's national storage and storage price. Investors should be short on high ground.