Trading downturn cotton "darkness warehouse"?

Recent uncertainties surrounding the macro-environment, market sentiment has rapidly changed, causing huge fluctuations to most of the bulk commodities. However, the Zheng cotton market supported by the national buying policy of the municipal support market. The main May contract contracted within a narrow range within the range of 19850-2070. The maximum volume was no more than 250,000 hands, and the lowest was around 80,000 hands. The performance was quite satisfactory. Behind the calm market performance, whether the market has or is undergoing some potential changes, and then brings opportunities for the future development of the market, it is worth investors attention.

The macroeconomic situation in the periphery is changing. The European debt issue that the market continues to pay attention to in the past two months. From the framework agreement reached on the EU's second summit on October 26, which is better than market expectations, the focus of attention should shift to the specific implementation of the agreement. Details, as well as whether China and other emerging economies have taken out the rescue, can focus on this week's G20 summit, which may involve market confidence. In addition, the main line of attention on the macro level should be transferred to the U.S. and China’s monetary policy. At present, Australia has cut interest rates, Brazil cut interest rates twice, and China has also revealed fine-tuning policies through various channels. Will the U.S. There are clear positions on the market that may have a far-reaching impact on the market.

Downstream consumption of cotton is still not good Since April and May 2011, due to the poor downstream consumption of cotton, especially the high yarn and cloth inventory, transmission has been hindered, and this has led to a long-term weak adjustment in cotton prices until now. The market generally believes that if there is no support for protection and protection prices, the cotton price may have already returned to the original point where the 2010 market started. Judging from the current market conditions, there is still no effective improvement in the downstream consumer market. Orders may shrink by more than 30% over the same period. Enterprises are still watching the cotton market with cold eyes and are not eager to replenish stocks. Although the textile industry's industrial inventory may have fallen to a relatively low level for several months, even a large-scale textile company in Shandong will reduce the price of the third-grade cotton by 300 yuan to 19,500 yuan (public weight, to the factory), lower than the national purchase and storage price .

The third phase of the Canton Fair, which was dominated by textiles and clothing, which began on October 31, did not convey too much interest, which was a constraint on higher cotton prices. In the situation where downstream consumption has not opened up yet, there is a possibility that the market outlook will deteriorate again, or there will be some turning points that need attention.

The increasingly active macro-level of storage and storage and the sluggish downstream consumption of cotton have caused a heavy repression in the cotton market and will dominate for a certain period of time. However, attention should be paid to the supply side. These aspects may play a role in the future market transformation. . The current spot market's highest degree of attention is undoubtedly the collection of storage, the data show that as of October 31, 2011, the cumulative transaction volume of temporary cotton purchases and sales of 117,940 tons, of which 85,040 tons of accumulated turnover in Xinjiang, the Mainland accumulated turnover of 32,900 tons. Since the transaction was conducted on October 8th, the trading volume on a single day has continued to increase. Recently, transactions in the Mainland have also continued to increase. China's cotton production this year is expected to be around 7.2 million tons. According to the current progress, there will be little problem of purchasing and storing up to 1.5 million tons by March 31 of next year. US cotton ended the week of October 20, and exports had already exceeded half of its exports in three months.

Considering that this year's cotton seed prices are generally lower than cotton seedlings, the enthusiasm for planting in the coming year may cool down. It is expected that the country will issue a further policy of purchasing and storing prices in March next year and keep the cotton price stable at a certain level, while maintaining the industry’s most Basic operating profit.

To sum up, the macroscopic side and downstream consumption basically face the heavy pressure of cotton futures, it is still an unavoidable topic, and will also suppress the rebound of the cotton market in the later part of the year. However, the determination of the country’s purchase and storage prices has, to a certain extent, spurred further declines in prices, and also established a pattern of sluggish phased cotton futures. In the later period, attention must be paid to changes in positions of short-term concentrated seats in the previous period. From the perspective of the long-term healthy development of the cotton industry chain, after the market fluctuation band is effectively determined, there will be a certain amount of volatility at the top. One or two thousand points may not seem excessive.