November 6, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures]5 month contract has low support near 19000.

Main points

1. Price Bulletin: domestic lint: 129 level 20520 yuan / ton; 229 level 19645 yuan / ton; 328 level 18791 yuan / ton; 428 grade 17969 yuan / ton. domestic Spin Product: polyester staple fiber 10450 yuan / ton; viscose staple fiber 14310 yuan / ton; C32S price 25750 yuan / ton.

2. domestic stock: the 5 day Zheng cotton fall did not change the steady trend of the domestic cotton spot market. Although the sales of individual varieties of textiles in October were better, the demand for cotton remained cold because of the steady recovery of the domestic textile industry as a whole. However, the role of the state regulation and control policy was obvious, and the stable market will be the mainstream trend of cotton this year.

3. imported cotton: in November 5th, the price of the main cotton imported from China was basically stable, and the individual varieties fell slightly. In the past half a month, with the decline of ICE futures, the quotations for cotton gradually weakened. In the case of tight domestic circulation resources, textile mills continue to actively purchase foreign cotton, and require that they arrive at the port before and after the end of the year so as to allow full customs clearance or advance the quota for next year.

4. the purchase and storage of new cotton: last week (October 29, 2012 -11 2) was the 2012 week of cotton temporary storage and storage transaction for seventh weeks, and the weekly volume of warehouses in the mainland continued to increase. As of November 2nd, a total of 1 million 924 thousand and 500 tons were registered this year, of which 1 million 378 thousand and 300 tons in Xinjiang and 546 thousand and 200 tons in the mainland.

5.ICE cotton: in November 5th, ICE futures were repeatedly oscillating around 70 cents. The competition between the two sides was fierce and the market direction was not clear. At present, investors are focusing on the forecast of the global cotton production and marketing forecast released by USDA in November this week. The market expectation report will be neutral, and cotton prices will remain oscillating before the news is clear.

Summary:

The current cotton price level is equal to 40% of the total tariff and the price of domestic Xinjiang cotton is not equal. There is no great advantage in the price of cotton. Pressure is the United States, China's cotton demand is weak, stock more background, although the space is also limited, but because of the existence of the purchase and storage of the next step, Zheng cotton still based on stability. It is suggested that we should pay more attention to the opportunities for important support positions. The May contract has low support in the vicinity of 19000.

[MEIKO futures] before the end of the purchase and storage, the pressure is still on the decline.

Overnight, ICE futures oscillate around 70 cents, and the competition between the two sides is fierce. At present, investors are focusing on the forecast of the November global cotton production and sales forecast released by USDA this week. The market expectation report will be neutral, and cotton prices will remain oscillating before the news is clear.

In the international market, 5 days, the price of the main cotton imported from China was basically stable, and the individual varieties fell slightly. In the past half a month, with the decline of ICE futures, the quotations for cotton gradually weakened. In the case of tight domestic circulation resources, textile mills continue to actively purchase foreign cotton, and require that they arrive at the port before and after the end of the year so as to allow full customs clearance or advance the quota for next year. From now on, cotton producers are also actively preparing for sales in the first half of the year, and the end of the year is expected to boost the import cotton market.

The domestic market, 5, yesterday, Zheng cotton fell sharply did not change the domestic cotton spot market steady trend, although the sale of individual varieties of textiles in October is better, but because the domestic textile industry as a whole has not seen signs of steady recovery, the demand for cotton is still cold, but the role of national regulatory policy is obvious, stable market will be the mainstream trend of cotton this year.

　　 successor prince Dynamic, in November 5th, the State Cotton temporary storage and storage of 70350 tons, as of 5, 2012 cotton temporary storage and storage transactions totaled 1994830 tons, of which 576910 tons in the mainland, 1417920 tons in Xinjiang.

Spot quotation, November 5th, US C/A cotton 87.10 (cents / pound, same below), discount general trade port delivery price 14772 yuan / ton (according to sliding tax calculation), Australia cotton 92.60, discount general trade port delivery price 15465 yuan / ton; Uzbekistan cotton 88.50, discount general trade port delivery price 14945 yuan / ton; West Africa cotton 84.10, discount general trade port delivery price 14412 yuan / ton; India cotton 83.10, discount general trade port delivery price 14295 yuan / ton. The national cotton price A index was 19651 yuan / ton, up 1 yuan; the B index was 18796 yuan, up 1 yuan.

Market analysis, the new year's global sugar futures stocks increased substantially, of which more than half of them are in the national reserve, coupled with the new year's decline in the US cotton grade, resulting in the majority of high-grade cotton in China, although consumption is still weak, but the price trend depends more on future National Reserve regulation, policies tend to maintain stability, so before the completion of the purchase and storage of the price will still feel the pressure, followed by the narrowing of the amplitude of the interval fluctuations. Zheng cotton stabilized in the 19000-20000 range of shock, backed by the shock axial test pressure failed, short run weak.

On the operation, the early blank list continues to hold.

Wanda futures] China receives nearly two million tons of reserves to support us cotton down

As of November 5th, China has accumulated 1 million 996 thousand tons of new cotton, which is 8 times the same period in the previous year, which is supporting ICE cotton. On Monday, the ICE cotton March contract rebounded on the support of commercial buying after hitting 70.94 cents lows, and gained 0.21 cents to 71.65 cents / pound throughout the day. Although it stood at 70 cents / pound, it still failed to shake off the weakness pattern of the low side. At the same time, the number of new cotton market in the northern hemisphere increased, the supply pressure gradually emerged, and consumption did not improve. The fund purchase was tied to the December contract, which lacked positive support. ICE cotton was difficult to get rid of the downtrend and continued to focus on the strong support position of 70 cents / pound in March.

On Monday, ICE cotton fell and rebounded, and the main force in March stood at 70 cents / pound, but it was still suppressed by the short-term average. The short and medium term average line kept the drop in alignment, and the KD and MACD indexes continued to fall short. The MACD index green column began to grow, and the downward trend did not change. In March, the contract will challenge 70 cents / pound strong support position.

As of November 5th, 83.32% of China's public inspection cotton will be in storage, far higher than the previous year. According to this progress, the end of this month will be a breakthrough of 3 million 500 thousand tons in China, exceeding the total annual storage capacity of 3 million 250 thousand tons in the previous year, which will lead to tight domestic short-term resources. But at present, the domestic and foreign cotton prices remain high, and China's exports are still in the doldrums. In November, the United States and India's new cotton will go on the market. The huge price difference will make textile enterprises import international cotton with low tariffs. At present, the price of zhengmian is still much higher than the spot price of international and domestic cotton. It is difficult to attract the interest of textile enterprises. In this case, Zheng cotton will maintain a weak pattern, continue to hold empty bills, and pay close attention to the strong support position of 19000 yuan / ton. {page_break}

[Yi De futures] spreads widened in the near and far months.

CF1305 opened low on Monday, and CF1305 closed more than 12.1 million hands. CF1305 closed at 19045 yuan / ton, down 255 yuan / ton, increased 20592 positions; in November 5th, China's imported cotton (FC Index M) 84.11 cents / pound, up 0 cents / pound, 1% yuan tariff reduced price 13539 yuan / ton, sliding price conversion price 14490 yuan / ton.

According to New York's November 5th news, ICE cotton futures rose slightly on Monday, and the market lacked the direction of trading. ICE12 contract settlement price rose 0.1%, at 70.40 cents per pound.

In November 5th, the cotton trading market in the national cotton trading market reached 11720 tons, an increase of 580 tons over the previous transaction, a reduction of 420 tons in orders, and a total purchase of 60520 tons. On the 5 day, the opening of each contract was mixed. On the basic level, from the 112nd Canton Fair situation, the number of buyers and sellers declined, both of which fell by more than 10% year-on-year, and the foreign trade situation was not optimistic. Many enterprises said they had great pressure in the interview.

Monday Zheng cotton Low open and low, heavy volume to break through the track below the interval, and the contract is still in the range of operation in recent months, the difference between near and far is 400 yuan, and it is not recommended that investors should chase 05 contracts. They can receive more orders when appropriate, and if 19000 is supported. Today's operation suggests that attention should be paid to the 19000 support, which can effectively lower the number of returns, and the reference price range of CF1305 is 19000-19300.