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Cotton Price Stabilizes &Nbsp In Short Term, And Should Not Be Too Empty.

2011/7/20 16:15:00 25

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Cotton futures, which are showing signs of low growth, have seen signs of stabilization this week.

From the recent market trend, we can see that the most concerned species are cotton.

We believe that if cotton can stop and stabilize, the momentum of commodities going upward will be more sufficient, otherwise it will still be difficult to shake off the market.

The cotton price of 2010/2011 in September represents a so-called "de bubble" process after the explosion in 2010.

According to the survey, cotton farmers generally believe that if seed cotton sells less than 4.5 yuan a kilogram this year, they will face losses. Obviously, the price of the January contract is not up to that standard.

The overall demand of the textile industry is still poor in the near future.

Stock

Continued decline, while yarn stocks remain high.

The national cotton industry has a stock of about 1 million tons, a decrease of 3.1% compared to the same period, a decrease of 11.9% over the same period last year.

At the same time, most of the yarn stock remained at a high level of about 45 days, but the proportion of enterprises preparing to purchase raw materials is picking up.

Cotton yarn stocks remain high, the pressure on enterprise funds is difficult to alleviate, and the pure cotton yarn market remains weak.

Last week, Wei Qiao sharply reduced the purchase price of grade 4 cotton, which dealt a heavy blow to the market.

According to the survey results, cotton

Stock

Mainly concentrated in textile mills, yarn is currently a clear manifestation of cotton inventory, corresponding to the sharp decline in export orders.

The weakening of exports in Europe and America on the one hand stems from the weakness of demand itself, on the other hand, it is caused by the impact of other developing countries on China's textile and clothing exports.

Because of the increase in the cost of domestic textile and garment industry, the competitiveness of textile and garment exports has been greatly reduced.

Especially after entering April, the proportion of textile and clothing imports from China began to decline significantly.

From the whole world

Supply and demand of cotton

In view of the situation, cotton production in 2011/2012 will increase substantially compared with that of last year, while consumption expectation has increased slightly, but it is slightly less than the increase in output.

This led to a slight increase in stock consumption, to a certain extent, indicating that the new year's global cotton market supply imbalance has improved.

If the weather is normal in August, the output of cotton will be clearer.

In terms of domestic output, cotton information network research shows that China's cotton planting area is estimated to be 81 million 340 thousand mu in the new year, an increase of 5.6% Mu compared with 2010 in the year of 2010, with an estimated output of 7 million tons and an increase of 12% in the same caliber.

On the premise that demand has not yet been lifted, the increase in the forecast of new cotton production is no doubt a great suppression on the 1201 contract, so the market's widespread voice is not surprising.

We think that the worst possible time for the textile and garment industry is over.

Coupled with the arrival of the peak season of consumption in the second half of the year, yarn inventory will gradually decrease, and the suppression of cotton prices will slow down. The medium-term support of the 1201 contract in the 21000 Yuan line may be favorable.

In the short term, the probability of a steady fall is still greater.

Investors should not go too far.