November 8, 2012 Institutional Watch - Cotton Futures

[Hongyuan futures] Zheng cotton's reunion and low thinking

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

Product: polyester staple fiber 10450 yuan / ton; viscose staple fiber 14310 yuan / ton; C32S price 25750 yuan / ton.

2. domestic stock: 7, the domestic cotton market continued to operate smoothly.

The market support function of the storage and purchase measures will help stabilize the price of the domestic cotton spot market. However, the domestic and foreign cotton prices remain high. The export of China is higher than that of the domestic market, but the growth rate is still not optimistic. In November, the new cotton market in the United States and India will be listed in large quantities. The huge price difference may push the textile enterprises to import the cheap international cotton.

3. cotton imports: in November 7th, except for Brazil cotton quotations increased by 0.5 cents, other places of origin cotton prices in China generally declined, the United States cotton fell 0.25 cents, West Africa cotton and India cotton fell 0.5 cents.

Judging from the market situation, with the price of Cotton falling repeatedly in recent years, the low price and low quality cotton is favored by the textile mill. The inquiry price of the textile factory is more positive, and the quantity of purchase is not large, but it is maintained with the purchase.

4. the purchase and storage of new cotton: in November 7th, the China cotton reserve management company planned to collect and store 133900 tons of cotton in 2012, and the actual turnover was 64460 tons. As at November 7th, the cotton temporary storage and storage pactions in 2128430 reached 2128430 tons in November 7th, including 636910 tons in the mainland and 1491520 tons in Xinjiang.

5.ICE cotton: in November 7th, as the ICE futures December contract delivery day approached, the index fund began to shift to a large scale, the downward pressure on cotton prices increased, and the peripheral market generally weakened, resulting in the December contract settlement price breaking 70 cents, the lowest record since July 25th.

At present, the market is expected to report USDA supply and demand report will also reduce the global cotton consumption level, supply pressure is difficult to alleviate, cotton prices will continue to remain weak.

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.

Judging from the structure of Zheng cotton futures, when the price of zhengmian is higher than the cotton price of social circulation, the enterprises that buy cotton do not have the power to choose futures purchase channel.

This determines that futures prices lose the buying power from spot enterprises.

On the one hand, we must stick to the idea that "China's cotton price will be stable for a long time". On the other hand, we should pay full attention to the policy of purchasing and storing in operation, focusing on the idea of doing more with lower prices.

Wednesday's CF1305 sideways turbulence, CF1305 closed more than 5.2 million hands, a small increase in positions.

CF1305 closed at 19145 yuan / ton, down 5 yuan / ton, increased 5310 positions; in November 7th, China's imported cotton (FC Index M) 83.75 cents / pound, fell 0.36 cents / pound, 1% yuan tariff reduced price 13482 yuan / ton, sliding price conversion price 14455 yuan / ton.

According to New York's November 7th news, US cotton futures hit a three and a half low on Wednesday, as investors again worried about the US economy after President Obama was re elected, thereby withdrawing capital from commodities and financial markets.

ICE12 cotton contract settlement price fell 0.4%, at 69.83 cents per pound.

In November 7th, the cotton trading market in the national cotton trading market reached 12380 tons, an increase of 1120 tons over the previous paction, an order reduction of 480 tons and a total purchase of 58160 tons.

On the 7 day, the contract was opened up, with a narrow fluctuation within the day.

On the basic level, the progress of collecting and storing is fast, and the enthusiasm for market storage is high. In addition, spot prices are still far below the purchasing and storage price, causing textile enterprises to worry about the recent sources of cotton.

Hopefully in the short term.

On Wednesday, Zheng cotton sideways shook, technical indicators became necrotic, the overnight market fell, the US general election would be over, and European economic worries were resumed.

Today's operation suggests that the CF1305 reference price range is 19000-19300.

Overnight, on the 7 day, as the ICE futures contract delivery notice December approached, the index fund began to shift to a large scale, the downward pressure on cotton prices increased, and the peripheral market generally weakened, resulting in the December contract settlement price breaking down 70 cents, the lowest record since July 25th.

At present, the market is expected to report USDA supply and demand report will also reduce the global cotton consumption level, supply pressure is difficult to alleviate, cotton prices will continue to remain weak.

In the international market, except for Brazil cotton quotations increased by 0.5 cents yesterday, the quotations of other cotton producing countries in China generally declined, while the United States cotton fell 0.25 cents, while West African cotton and India cotton fell 0.5 cents.

Judging from the market situation, with the price of Cotton falling repeatedly in recent years, the low price and low quality cotton is favored by the textile mill. The inquiry price of the textile factory is more positive, and the quantity of purchase is not large, but it is maintained with the purchase.

However, at present, the new cotton market in the northern hemisphere is coming into season, coupled with the high inventory in the world and the obvious pressure on China's stock market to the market.

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Domestic market, 7, domestic cotton market continues to run smoothly.

The market support function of the storage and purchase measures will help stabilize the price of the domestic cotton spot market. However, the domestic and foreign cotton prices remain high. The export of China is higher than that of the domestic market, but the growth rate is still not optimistic. In November, the new cotton market in the United States and India will be listed in large quantities. The huge price difference may push the textile enterprises to import the cheap international cotton.

In November 7th, the national cotton temporary storage and storage business reached 64460 tons. As of that date, 2012 cotton temporary storage and storage pactions totaled 2128430 tons in 2012, including 636910 tons in the mainland and 1491520 tons in Xinjiang.

Spot quotation, 7 days, C/A cotton 86.85 (cents / pound) in the US, discount general trade port delivery price 14768 yuan / ton (calculated by sliding tax); Australia cotton 92.35, discount general trade port delivery price 15455 yuan / ton; Uzbekistan cotton 89.85, discount general trade port delivery price 15137 yuan / ton; West Africa cotton 83.85, discount general trade port delivery price 14411 yuan / ton; India cotton 82.85, discount general trade port delivery price 14295 yuan / ton.

The national cotton price A index was 19656 yuan / ton, up 3 yuan; the B index was 18801 yuan, up 3 yuan.

Market analysis, the current collection and storage work continues to provide support for the market, as of November 7th, the cumulative turnover has exceeded 2 million tons, with the entry and storage of high-grade cotton, the trend of cotton prices in the later period depends mainly on consumption and imports of cotton, and cotton prices will steadily return to industry demand.

The US cotton fatigue shows the 70 line shaky; Zheng cotton fluctuates in the 19000-20000 interval, the 01 contract shocks the axis direction, 05 contract pressure 19290, supports 19000.

Operation, 01 wait-and-see, 05 short line 19290-19000.

[Wanda futures] fund renewal paction makes us cotton pressurized concussion finishing

Starting Wednesday, Goldman Sachs index fund started to contract until March. Meanwhile, USDA will announce monthly supply and demand report this week. The market expects that the global end of stock is expected to reach 17 million 400 thousand tons as the consumption continues to shrink, while the main consumer countries' import policy in China is still facing greater uncertainty. In this case, ICE cotton continued to fall slightly on Wednesday, and the contract fell 0.17 cents to 71.07 cents / pound in March.

At present, India and the United States have been listed on a large number of new cotton, the supply pressure is showing, but demand has not been aroused. Before the end of the fund's extension, ICE cotton will maintain a low level of shock pattern, focusing on the strong support position of 70 cents / pound in March.

On Wednesday, the ICE cotton rush rate fell down, but the main contract in March was stable 70 cents / pound, but far from the short-term average line suppression, the short and medium term average line kept the drop in order, the KD and MACD index continued to fall short, the MACD index green column began to grow, the downward trend did not change, and the March contract will challenge 70 cents / pound strong support position.

As of November 7th, China's public inspection of cotton 81.5% into the storage, 2 million 129 thousand and 300 tons of total reserves of 7.5 times the same period in the same period last year, according to this progress estimate, the end of this month will exceed the total storage capacity of 3 million 250 thousand tons in the previous year, while India may purchase and store 1 million 530 thousand tons of cotton, these factors become the main support for cotton prices.

However, at present, India and the United States have been listed on a large number of new cotton, and the pressure of supply is obvious. Chinese buyers are constrained by the uncertainty of the import policy of the new year, and there is not enough buying and selling. The huge price difference between domestic and foreign cotton continues to inhibit China's exports and consumption.

We will maintain a long-term weak pattern and continue to hold empty orders, focusing on the strong support position of the 1305 contract of 19000 yuan / ton.