November 13, 2012 Institutional Watch - Cotton Futures

Main points

1. Price Bulletin: domestic lint: 129 level 20535 yuan / ton; 229 level 19661 yuan / ton; 328 level 18807 yuan / ton; 428 grade 18002 yuan / ton.

Domestic textiles: polyester staple fiber 10400 yuan / ton; viscose staple fiber 14410 yuan / ton; C32S price 25790 yuan / ton.

2. domestic spot: 12, the domestic cotton spot market prices rose slightly, the new year's national acquisition and storage paction speed and volume are significantly higher than last year, the enterprise storage storage positive, mid November volume has reached 3 million tons, the state's unlimited purchase and storage decision support the bottom of cotton price, plus the state before the end of December, no quota, textile enterprises have no cotton available, the cotton market price will continue to rise.

3. imported cotton: in November 12th, the price of China's main cotton imports rose by 0.25 cents.

The US cotton export weekly report shows that although the USDA's negative report continues to put pressure on the fundamentals, the demand for cotton at a price of 70 cents is obvious. Huge internal and external spreads have created conditions for many textile enterprises to pay full tariffs for the purchase of foreign cotton. At present, foreign bonded cotton quotations are rare.

Under the support of China's unlimited storage, the price of outer cotton will remain stable.

4.USDA11 month report: global cotton production increased by 111 thousand tons in 2012/12, including countries such as Uzbekistan and the United States. The consumption volume was reduced by 118 thousand tons, of which China reduced by 109 thousand tons; trade volume consumption increased, and final inventory increased by 17 million 477 thousand tons, increasing by 253 thousand tons.

5.ICE cotton: in November 12th, ICE phase cotton opened up after a narrow range of fluctuations, followed by buying intervention intervention, but failed to break through 72 cents to trigger investors to sell, cotton prices late stage around 71 cents fluctuations, eventually all month contracts rose.

Summary:

The USDA11 report continued to increase production and reduce consumption. Global end inventory continued to increase.

This indicates that the global cotton market is oversupply.

However, judging from the market, cotton prices have stimulated the demand for breeding grounds after the fall of cotton prices, supporting ICE cotton.

Zheng cotton aspect, from the current structure, when the price of Zheng cotton is higher than the cotton price of social circulation, the cotton buying enterprise has no power to choose futures purchase channel.

This determines that futures prices lose the buying power from spot enterprises.

During the period of storage and purchase, we insist that the "cotton prices in China will run steadily for a long time". We must pay close attention to the policy of purchasing and storing in operation, and focus on the idea of doing more bargain.

[MEIKO futures] global cotton prices look at China zhengmian 05 to see 18950 support

Overnight, the ICE price rose 1.8% on Monday, the biggest one-day gain in nearly a month, as technology buying signals and commercial buying were overshadowed by weak supply and demand fundamentals.

The initial price rose nearly 2 cents or more than 3%, to two weeks high, 71.69 cents per pound, triggered by last week's crash.

Industry information: 1, imported Pakistan cotton yarn spreads 2000 yuan, favored by spinning enterprises.

2, the United States accuses India of textile export subsidies.

Textiles in 3 and October 2012

Export volume decreased by 9.45%.

In the international market, 12 days, the price of China's main cotton imports rose by 0.25 cents.

The US cotton export weekly report shows that although the USDA's negative report continues to put pressure on the fundamentals, the demand for cotton at a price of 70 cents is obvious. Huge internal and external spreads have created conditions for many textile enterprises to pay full tariffs for the purchase of foreign cotton. At present, foreign bonded cotton quotations are rare.

Under the support of China's unlimited purchase and storage, the price of cotton will remain stable.

Domestic market, domestic cotton spot market prices rose slightly, the new year national storage and acquisition pactions speed and volume are significantly higher than last year, the enterprise to store positive, in mid November volume has reached 3 million tons, the state's unlimited purchase and storage decision support the bottom of cotton prices, plus the national before the end of December, no quota, textile enterprises have no cotton available, cotton market prices will continue to rise.

In November 12th, the national cotton temporary storage and storage business reached 64520 tons. As of that date, 2012 cotton temporary storage and storage pactions totaled 2296350 tons in 2012, including 716230 tons in the mainland and 1580120 tons in Xinjiang.

Spot quotation, November 12th, the United States E/MOT cotton 83, discount general trade port delivery price 14295 yuan / ton; Australia cotton 91.60, discount general trade port delivery price 15345 yuan / ton; Uzbekistan cotton 89.60, discount general trade port delivery price 15091 yuan / ton; West Africa cotton 83.60, discount general trade port delivery price 14364 yuan / ton; India cotton 83.35, discount general trade port delivery price 14335 yuan / ton.

CNCotton A 19668 yuan / ton, up 7 yuan; B index 18816 yuan, up 9 yuan.

Market analysis, domestic cotton spot market prices rose slightly, in mid November volume has reached 3 million tons, the state's unlimited purchase and storage decisions support the bottom of cotton prices, coupled with the state before the end of December no quota, to support the formation of cotton prices.

The weakness of the US cotton market was low, the zhengmian 01 average line was bonded, and the shock was narrow; the 05 contract was concerned with the support below 18950.

On the operation, 01 wait-and-see, 05 contract 18950, if a drop can be a small test.

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[Wanda futures] area speculation to the United States cotton upsurge in the market

The overnight market has been dragged down by worries about the US fiscal cliff problem. International commodities have generally fallen sharply, but the market expects us cotton planting area to drop sharply next year. At the same time, China's acquisition and storage reached 2 million 426 thousand tons, and China's spot cotton price was strong, which led to a rebound in ICE before, and the contract in March closed 0.76 cents to 71.2 cents / pound, once again standing 70 cents / pound.

But the pressure on India and the United States to increase the listing of new cotton has gradually increased. China's buying is constrained, and short term cotton prices are hard to get enough support to buy. Short rebound can not change the long-term downtrend and continue to focus on the strong support position of 70 cents / pound.

On Monday, the ICE cotton rush rate fell down, but the main contract in March stood 70 cents / lbs above, but failed to break through the suppression of the short-term average. The average system maintained a good drop in alignment, and the KD and MACD indexes continued to fall short. The MACD index runs smoothly, and cotton prices are still in a downward trend. It is expected that the March contract will continue to challenge the 70 cent / pound strong support position.

As of November 12th, China has accumulated 2 million 426 thousand tons of cotton and 2 million 958 thousand tons of public inspection cotton. A large number of new cotton imports and storage have caused domestic resources shortage. However, the huge domestic and foreign cotton price difference has led to the shrinking of China's exports and consumption. The import cotton has been cleared by customs in a full tariff mode, which has been substantially lower than domestic cotton prices to attract textile companies to buy.

It is expected to follow the rebound of the US cotton, but it is difficult to change the long-term weakness pattern. With the increase of 1305 contracts, the short-term target is still a strong support level of 19000 yuan / ton.