October 12, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] global cotton stocks continue to increase

Main points

1. Price Bulletin: domestic lint: 129 level 20514 yuan / ton; 229 level 19641 yuan / ton; 328 level 18782 yuan / ton; 428 grade 17940 yuan / ton.

domestic

Product: polyester staple fiber 10900 yuan / ton; viscose staple fiber 14890 yuan / ton; C32S price 25690 yuan / ton.

2. domestic stock: 11, domestic cotton spot prices continue to operate smoothly.

The price of cotton purchase and storage made by the state is 20400 yuan / ton, which is quite independent of the price of gold and chicken. It is higher than the price of spot and futures, and is higher than the price of matchmaking. At present, farmers and cotton related enterprises choose to store their stocks. With the continuous increase of cotton inventories and the lack of purchasing power of textile enterprises, the new cotton market will continue to exceed demand.

3. imported cotton: in October 11th, the price of China's main port of imported cotton rose slightly, or 0.20-0.30 cents, and India cotton rose 1 cents.

Recently, although the international cotton price has stabilised near 70 cents, the global supply and demand may continue to be loose, and the risk of late price fall is still very large. Therefore, the procurement of foreign cotton by textile enterprises is mainly based on wait-and-see.

4.USDA: according to the October global cotton supply and demand report of the US Department of agriculture (USDA), the world's cotton production in 2012/13 was 25 million 327 thousand tons, an increase of 501 thousand tons compared to September, 23 million 269 thousand tons of consumption, 148 thousand tons reduction, 7 million 340 thousand tons of global cotton trade, 30 thousand tons reduction, 17 million 225 thousand tons of final inventory, 565 thousand tons of increase, and an increase of 6.6 percentage points in inventory consumption than 74.03%.

5.ICE cotton: in October 11th, the US Department of Agriculture announced the forecast of global cotton production and demand in October.

Compared with the September forecast, global cotton production increased by 499 thousand tons in 2012/13, and consumption was reduced by 148 thousand tons.

Affected by this news, ICE cotton prices fell sharply.

Summary:

The relevant government departments will hold a meeting to analyze the current cotton production and marketing situation and deploy the cotton work in 2012, and the NDRC will implement the temporary purchasing and storage policy to ensure open purchase and storage.

But we believe that the three tier structure of cotton prices in China will not change until the global demand for cotton has improved significantly.

USDA's demand and supply report released yesterday showed that global output increased, consumption decreased, and end inventory continued to increase.

We maintain the idea that cotton prices will run at a low level for a long time. On the other hand, we suggest that we should focus on the idea of lowering prices at the time of purchase and storage.

[MEIKO futures] new year end inventory is expected to increase cotton market trend pressure is difficult to change

Overnight, in October 11th, the US Department of Agriculture announced the global market in October.

Production and demand forecast data are not good.

The price of cotton fell sharply during the ICE period.

Due to the aggravation of the fundamentals, the price of cotton in the ICE period is still falling.

In late September, Fu Stone Company (FCStone) predicted that the ICE cotton contract in December could even fall to 60 cents. At present, the weakness of cotton market is still in progress.

News, USDA global production and demand forecast in October indicated that global production increased significantly and consumption decreased in 2012/13. Therefore, the world's final stocks increased by 566 thousand tons, and the countries whose output increased were mainly India, China, Brazil, Pakistan and the United States.

The global consumption is reduced by 435 thousand tons, because the high price of China's purchasing and storage has a negative effect on cotton consumption.

The end of the world inventory was increased to 17 million 222 thousand tons, of which 8 million 56 thousand tons came from China.

In the international market, in October 11th, the price of China's main port of imported cotton rose slightly, or 0.20-0.30 cents, and India cotton rose 1 cents.

Recently, although the international cotton price has stabilised near 70 cents, the global supply and demand may continue to be loose, and the risk of late price fall is still very large. Therefore, the procurement of foreign cotton by textile enterprises is mainly based on wait-and-see.

Domestic market, 11, domestic cotton spot prices continue to operate smoothly.

The price of cotton purchase and storage made by the state is 20400 yuan / ton, which is quite independent of the price of gold and chicken. It is higher than the price of spot and futures, and is higher than the price of matchmaking. At present, farmers and cotton related enterprises choose to store their stocks. With the continuous increase of cotton inventories and the lack of purchasing power of textile enterprises, the new cotton market will continue to exceed demand.

State Reserve dynamics, 1, as of October 11th, 2012 cotton temporary storage and storage pactions totaled 669290 tons, of which 122970 tons in the mainland, and 546320 tons in Xinjiang.

Spot quotation, October 11th, the US C/A cotton 88.10 (cents / pound), discount general trade port delivery price 15026 yuan / ton (calculated by sliding tax); Australia cotton 93.10, discount general trade port delivery price 15671 yuan / ton; Uzbekistan cotton 87.70, discount general trade port delivery price 14976 yuan / ton; West Africa cotton 84.35, discount general trade port delivery price 14565 yuan / ton; India cotton 84.10, discount general trade port delivery price 14535 yuan / ton.

The national cotton price A index was 19642 yuan / ton, up 1 yuan; the B index was 18783 yuan, up 1 yuan.

Market analysis, overnight U.S. Department of Agriculture recently released monthly global supply and demand data show that the end of the world inventory increased by 564 thousand tons, only 17 million 224 thousand tons, thereby increasing the market pressure on the new year supply pressure, the outer disk is approaching 70 lower front line, Zheng cotton in the purchase and storage to boost slightly support, the average system is tight, Zheng cotton is expected to shock near the 60 day moving average.

Operation, wait-and-see or short-term operation.

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[one German futures] report bad, Zheng cotton continues to fall

On Thursday, CF1301 opened and closed, and CF1301 closed more than 5.7 hands.

CF1301 closed at 19435 yuan / ton, down 115 yuan / ton, increased 7704 positions; in October 11th, China's imported cotton (FC Index M) 85.45 cents / pound, up 0.31 cents / pound, 1% yuan tariff reduced price 13830 yuan / ton, sliding price conversion price 14707 yuan / ton.

According to New York's October 11th news, cotton futures fell sharply on Thursday, the largest single day decline in three weeks, due to the US Department of agriculture's October crop supply and demand report for third consecutive months, the global 2012/13 cotton end of year inventory forecast to record high and low demand.

ICE12 cotton settlement price fell 1.9% or 1.39 cents, at 70.71 cents per pound.

In October 11th, the cotton trading market of the national cotton trading market reached 13620 tons, an increase of 3400 tons compared with the previous trading day, a reduction of 4660 tons of orders and a total purchase of 88320 tons.

On the 11 day, the opening of contracts was high and low, and the weak shocks during the day ended in a fall.

Fundamentally speaking, because of the slow growth of global economy and the complete dissolution of the European debt crisis, the growth rate of the emerging economies as a global economic engine is also showing signs of decline. At present, the market sides are pessimistic about the late economic trend.

Although the cotton spot market paction continues to be weak, cotton prices remain relatively stable from the policy protection of purchasing and storing.

On Thursday, Zheng cotton went down, and the price began to go down. Last night, the USDA report again recorded a record closing inventory. The pressure on cotton market was not reduced, and no entry was allowed to continue. The overnight target could continue to hold. The target was 19200. Overall, the long term shock interval was hard to break.

Today's operation suggests that the open space can continue to enter, and the overnight air can continue to hold. The CF1301 reference price range is 19200-19500.

[Wanda futures]USDA monthly report to cotton prices fell sharply

Overnight, USDA released the monthly supply and demand report in October, raised the global output from 501 thousand tons to 25 million 327 thousand tons, and the consumption dropped 148 thousand tons to 23 million 269 thousand tons, of which China's consumption dropped 436 thousand tons to 7 million 838 thousand tons, which resulted in the global terminal stocks being increased 565 thousand tons to 17 million 225 thousand tons.

The bad report made the ICE cotton fall sharply, and the December contract fell 1.39 cents to 70.71 cents / pound, the lowest in the intraday price to 70.41 cents / pound, with the trend of challenging 70 cents / pound integer supporting position.

Among them, the output of India increased by 218 thousand tons, and the supply of new cotton in the northern hemisphere increased. However, the consumption will shrink and the downtrend will continue. We will pay close attention to the strong support position of 70 cents / pound in December.

Overnight, the United States cotton Yin Yin closed again, closed below the short-term average, the December contract challenges 70 cents / pounds strong support position, the average system has maintained a good drop in the arrangement, KD and MACD indicators continue to fall short, MACD index green pillar growth trend, the trend will continue, such as December 70 cents / pound strong support fall, the downlink space will be opened, the target to 65 cents / pound line.

The market is expected to lose its USDA monthly report on Thursday. Meanwhile, global consumption will continue to decline as a result of the recession in the euro area. The pessimism of the report has led to a fall in cotton prices in the late afternoon.

On the other hand, the supply pressure of the new cotton market in the northern hemisphere, China and the United States and India is showing up. Although China receives 20400 yuan / ton of storage to support China's cotton price, it is difficult to pmit to the spot market in the environment of increasing supply and shrinking consumption.

At present, the difference between domestic and foreign cotton prices is widened, the demand of textile enterprises is limited to import cotton and cotton yarn, and the overall market initiative is not enough. The USDA monthly report on Thursday night sharply cut down China's consumption, and the overall market is still in a short position.

Will follow the US cotton to maintain a downward trend, to maintain a long-term short thinking continue to hold 1301 empty contracts, 19400 yuan / ton supporting the loss of the target to 19000 yuan / ton line.