Cotton Scenery No Longer

The near future cotton The fall in futures prices was larger than that of last year. commodity market There is a strong contrast between the identity of the stars. Guangsheng futures research and development center Xie Xianghua believes that the reason for this is that Zheng cotton has encountered two pressures of supply and demand, whether international. Cotton price Or in the domestic cotton market has been in a downward channel, the short term bear pattern remains unchanged, will continue to seek support. Since the beginning of April, although the continued decline in the US dollar has supported some commodity prices, cotton has been weakening. The cotton price in the ICE market has evaporated about 25% in the past month, and cotton prices in China have also been over 20%. As of Friday, Zheng cotton main contract 1109 closed at 26280 yuan / ton, weekly decline of 2055 yuan / ton.

　　 High cotton prices are being suppressed by gradually abundant supplies.

At present, cotton in the northern hemisphere, such as China, India and the United States, has entered the sowing season. Many agencies predict that the sown area of these countries has increased to varying degrees. The planting area in the United States has increased to 12 million 560 thousand acres, an increase of 14.5%; and the planting area in India has increased by 10%.

China, the world's largest cotton producer, has also improved its supply and demand this year. On Monday, the second (2011) cotton textile enterprise futures hedging exchange conference, Feng Mengxiao, director of information monitoring center of China cotton reserve management company, said that without accident, the contradiction between supply and demand of global cotton in 2011 will be significantly relieved, and the stock at the end of the year is expected to return to more than 10 million tons. In view of the large proportion of industrial and commercial inventories this year, cotton consumption is constrained by many factors.

Meanwhile, cotton picking in the southern hemisphere, such as Australia and Brazil, has already begun. Market participants pointed out that the supply from Brazil alone has already brought impact to the market. Brazil's Ministry of agriculture forecast in April that cotton production in Brazil in 2010/2011 will exceed 2 million tons for the first time, reaching 2 million 27 thousand tons, 420 thousand tons higher than the previous record of 2007/2008, an increase of about 800000 tons compared with the same period last year, an increase of 70%. The domestic cotton consumption in Brazil is only 1 million 100 thousand tons, and the remaining cotton will be transported to the international market.

　　 Liquidity tightens hot money out of cotton market

Global liquidity is gradually tightening. China has raised the deposit reserve ratio of financial institutions 10 times and raised interest rates several times since last year. India, Korea and other economies also tightened policies. The European Central Bank also announced interest rate rises earlier this month. At present, the end of the QE2 from the US is only 2 months. Although the possibility of raising interest rates by the Federal Reserve is not high, any measures beyond the expectation of maintaining the 0 interest rate will suppress the commodities dominated by cotton.

Speculative funds on cotton also began to withdraw from the market. According to CFTC's historical position report, the net position of the US cotton management fund has shown a downward trend since the fourth quarter of 2010. It slipped from around 56000 hands at the peak of September last year to more than 19000 hands last week.

　　 Domestic cotton demand shrinks

In recent weeks, the volume of US cotton export contracts has been negative. China has cancelled a large number of orders, which may lead to the failure of US cotton exports. Xie Xianghua, the Guangsheng futures research and development center, believes that although weather factors are expected to provide support for the market, I am afraid it is difficult to resist the impact of the weakening of cotton supply side and the obvious setback of China's demand to the market.

At present, the operating rate of domestic textile enterprises has dropped from 93.6% to 86.92%, and the ratio of cotton distribution to cotton has decreased from 83.6% to 81.54%. Many enterprises believe that the current market situation is tortured. As raw material supply cotton enterprises, the sale of lint sale is out of line, and textile enterprises are also under pressure. Some medium-sized textile enterprises have higher stock of yarn, and the phenomenon of substitution of raw materials for production is increasing. Market pressure is relatively large. In terms of seed cotton purchase, the market resources were relatively small, and the price of lint sales fell all the way, so the seed cotton purchase quotation continued to decline, and cotton mills basically stopped collecting. Many enterprises believe that the current market weakness is hard to change, and it has just entered a period of weakness.

　　 Operational suggestions remain empty.

Looking ahead, Xie Xianghua, the Guangsheng futures research and development center, believes that on the technical side, the main 1009 contract receives a long Yin line this week, which shows that the advantage of shorts is obvious, and the market is still in a downward trend. However, the current price deviates from the short-term average, and there are rebounding and correcting demand on the disk. Therefore, in view of the current low consumption of cotton downstream, the suggestion in operation is still empty.