Understanding Cotton Price Trends And Focusing On The Four Major Signals Needed For Turning Point

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Xiaobian of the network to introduce the cotton price trend is still downward, welcome turning point needs four big signals.

International and domestic cotton prices are still in the fall.

Zhengzhou cotton index fell from 15965 points in the second half to 12945 at present, or 18.92%.

Although it was affected by many factors such as the direct subsidy policy, the processing plant's cotton picking and cotton production reduction, the largest rebound was only 1455 points from 12570 to 14025.

Although investors believe that there are support for production reduction, warehouse receipt generation constraints, technical point support and other factors at the 13000 point, but from the long term trend of Zheng cotton index, the fall should not be completed, and the low position in 2008 seems to beckon.

In addition, this year, the domestic market hedging pactions prevailed, more hands and other commodities will be empty cotton approach, but also make the cotton futures contract weak.

I believe that some of the positive benefits of cotton market will only be temporary support unless there is a special effort.

On the operation, the high selling short is still reasonable, and the arbitrage between varieties and months can be carried out according to the price difference of the period.

Since the second half of this year, the major commodities in the world have fallen sharply under the background of the slowdown in economic growth and the decline of demand in major economies other than the US.

From international

Look, the OTLOOKA index dropped from 90.70 to 66.15, or 27.07%.

The FCINDEXM index of imported cotton fell from 92.14 to 70.69, or 23.28%.

Domestic cotton CCINDEX3128B index fell from 17390 points to 14706 points, or 15.43%.

International cotton supply and demand is still unbalanced.

According to the November USDA report, global cotton output was estimated at 26 million 42 thousand tons in 2014/2015, estimated at 24 million 789 thousand tons in terms of consumption and 23 million 375 thousand tons at the end of the year.

Although the total output of new cotton in the world is lower than that in the previous three years, the end of the world's cotton stocks continued to increase, and the inventory consumption ratio reached 94.3%, a record high for many years.

Domestic production cuts cannot be ignored.

USDA estimated cotton production in China in the new year was 6 million 532 thousand tons, down 8.4% from a year ago.

China's cotton information network is estimated at 6 million 20 thousand tons, down 13% from a year ago.

From the perspective of consumption, USDA estimated that consumption in China was 8 million 165 thousand tons (680 thousand and 400 tons per month), up 653 thousand tons over the same period.

China cotton information network estimated consumption of 7 million 750 thousand tons (645 thousand and 800 tons per month), a slight increase of 550 thousand tons.

In terms of inventory, UDDA estimated that China's stock will be 13 million 533 thousand tons, only 120 thousand tons less than that of last year.

The inventory consumption ratio reached 165.5%. According to the current monthly consumption estimate, it will take 20 months to digest these stocks.

From the downstream consumption situation, in October, the total retail sales of clothing of hundreds of major retail enterprises in China dropped by 2.5% over the same period last year.

In October, China exported 26 billion 538 million US dollars of textile and clothing, an increase of 10.18% compared with the same period last year, a decrease of 7.05%.

In January -10, China's textile and apparel exports totaled 248 billion 473 million US dollars, an increase of 6.36% over the same period last year, and the growth rate was reduced.

Domestic and foreign spreads remain high.

The result of the widening spreads is that the attractiveness of the outer cotton is still increasing, and the pressure on domestic cotton and domestic stocks is difficult to lift in the near future, and the downward driving of price continues.

Judging from the trend of ICE cotton fingers, 60 cents have been broken, once the support collapse here, below the sword 50 cents, the CIF result will be chilling.

International and domestic

When to reverse? I believe that judging the cotton market turning needs at least four signals: first, the order volume of textile mills; two, the yarn price is going up, of which the first two items need to maintain at least 2 months' time and a certain increment; the three is that cotton planting area and total output are reduced; four is that the global and Chinese cotton inventory is basically completed, and China's warehouse sales ratio is at a low level.