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Drought In Cotton Area Is Expected To Become A Rebound Market Promoter

2011/5/6 11:55:00 131

After the US cotton broke down 180 cents in mid April, it slipped all the way and fell fiercely. But recently, signs of stabilization have emerged in the 146.5 cents front-line.

While Zheng cotton, on Wednesday, added 26000 yuan / ton support to the warehouse, the short term trend continued, but there was a demand for overshoot and rebound.

Industrial chain to inventory is not yet finished, cotton is difficult to change the weak

After the Spring Festival of 2011, cotton

industry chain

All sectors have been actively taking inventory, but cotton prices have been declining due to the sluggish demand for consumer goods and the difficulty in selling cotton and cotton fabrics.

According to the data released by the NDRC in April 29th, the finished product inventory of industrial enterprises in the whole country increased by 23.2% at the end of 3, and the inventory backlog in April did not improve.

According to the composition index of China's Manufacturing Purchasing Managers Index (PMI) in April, raw material inventory index and supplier delivery time index increased slightly; the new order index and the new export order index dropped by more than 1 percentage points.

Specifically to textile enterprises, according to the survey of cotton textile enterprises of scale of 12 million 330 thousand spindles by China cotton information network, the cotton stock of textile enterprises at the end of March was 1 million 236 thousand tons, slightly reduced by 700 tons compared with February; the yarn inventory was 18.25 days, 3.66 days in February, and 1.65 days in February from 14.18 days in February.

The report released by the national cotton market monitoring system showed that as of April 11th, the yarn sales rate of textile enterprises was 84%, a decrease of 8.8 percentage points, the lowest level since September 2008, the stock days were 26.5 days, the annulus ratio increased 13.1 days, the highest level since March 2009.

Inventory backlog,

currency

Tightening and rising labor costs have put pressure on textile enterprises. Cotton prices have also declined as enthusiasm for purchasing cotton has increased.

In April, the leading textile enterprises in Shandong, Wei Qiao, cut down the purchase price of lint five times, and the reception price of 329 grade cotton fell from 25500 yuan / ton to 28500 yuan / ton at the beginning of the month, and the total decrease reached 3000 yuan / ton; and the week before May day, it was three consecutive times that the receiving price was reduced by 2000 yuan / ton.

The rapid decline in cotton prices has made the spot market wait and see atmosphere strong.

According to the author's rough estimate, the average cost of cotton stocks in cotton storage enterprises is 2600027000 yuan / ton, and the current spot price has made most of the cotton enterprises face losses.

At present, many enterprises still have a glimmer of expectation for the peak season of consumption in May, and expect that prices will rise again as a result of better consumption.

However, the author believes that if the real economy is not much improved and the order of the Canton Fair is not optimistic, the cotton textile industry chain will still be out of stock in the coming months, and cotton will not change its weakness.

Drought is expected to trigger

New cotton

Weather speculation

In April, cotton in the northern hemisphere has entered the seeding stage.

In the main cotton producing area of the United States, due to drought, cotton planting progress in Texas has lagged behind in previous years.

According to the United States Department of agriculture statistics, as of May, 1 cotton planting rate was 18%, an increase of 5 percentage points from the previous week; the same period in 2010 was 24%, and the average value in the past five years was 24%.

There were also varying degrees of drought in some cotton fields in the mainland of China in late April, which were unfavorable for cotton emergence and pplanting.

In the near future, Zheng cotton's holdings increased substantially, and capital activity increased. Drought is expected to trigger new speculation in new cotton.

In addition, as of May 3rd, Zheng cotton registered warehouse receipts amounted to 605, effective forecasts of 422, while Zheng cotton three contracts this year, the total position of more than 400 thousand hands, the low rate of market will restrict the decline in the price.

Conclusion {page_break}

Technically, Zheng cotton main 1109 contract is currently in the fourth wave decline after the fall of the Spring Festival, and is expected to be repeated at 26000 points.

In the process of Zheng cotton's decline, the position has always been increasing. If the weather continues to deteriorate, bulls will be able to use the weather hype to promote a rally.