Cotton Production Will Continue To Be A Year Of Reduction In 2016/17.

Judging from the current turnover rate of 100%, there is indeed demand for cotton in the market, but at present, the increase in futures has been out of the fundamentals and more due to the promotion of capital.

The subsequent market will be unloaded if the reserves are sold out, and the support for the term price will be interrupted. The cotton market will face a price correction.

According to the announcement, the State Reserve will start the round as the case starts after the current round of dumping and storage. The rotation time is from September to February of next year, and the number of rounds will not exceed 30% of the round reserves. According to the current estimated speed of dumping and storage, the current round of reserves will be able to reach 2 million tons of the plan, and the maximum turn in volume is 600 thousand tons. Then the market supply after February will be reduced by 600 thousand tons due to the turn in.

This will further reduce the supply of cotton on the market next year.

Coupled with the sluggish movement this year, the market's expectations for the current year's sluggish sales have been strengthened.

Considering cotton fundamentals will be better than in the near future.

This year's storage will end in August 31st, with a month and a half left.

Despite the recent increase in cotton daily throwing reserves to 30 thousand tons, the turnover rate remained at 100%, not falling, and the paction price remained high.

This has played an important role in supporting the market.

Whether or not the future can sustain such a dumping state will have an important impact on the price and the expectation of the next year.

If the amount of storage is thrown, the market will be suppressed.

The smoothness will also have an impact on the market.

At present, the policy attitude is still ambiguous, which brings imagination to the future market.

From the supply side, 2016/17 will continue to be a year of production reduction. In the year of production reduction, the market will be able to further reduce cotton because of the impact of rotation. From the demand side, the competitiveness of domestic yarn to imported yarn will continue to recover.

Cotton needs or increases as conditions improve.

Cotton production is expected to be better in the long run than in the month when production cuts, rotation and seasonality are taken into consideration.

But in the next year, it will be a policy risk to throw or store up cotton prices.

At present, due to the sluggish impact of this year's dumping and storage, the market is not expected to sell stocks in the next year. Investors can finish the cotton market long before the market is expected to change or the next year's rules will be announced.