Cotton Market Pattern: Summary And Operation Suggestion

At present, the pattern of cotton market is: India's purchasing and storage and corps have stabilized the international and internal markets, and the US cotton has expedite exports at a low price, achieving 90% of the total expected export volume.

Good sales of US cotton also mean that the sales pressure of China and India is postponed.

Xinjiang processing plant due to the higher cost in the early stage, the price continues downward, the processing plant generally loss, and the Corps identity is special, so 11-12 months Xinjiang overall as a price, at present, because local enterprises are facing the pressure of loan repayment, and the spot has not improved, so the quotation fell, and the corps cotton price difference.

The mainland started to weigh late.

Many enterprises have been very successful, and cotton farmers are reluctant to sell, so there is no centralized selling period this year.

On the whole, the cost control in mainland is slightly better than that in Xinjiang. At present, the Corps continue to be very expensive, and the price of Xinjiang local cotton gradually comes closer to the mainland cotton.

After a fall in Xinjiang's local cotton prices, the domestic stock market has formed a new balance, and the overall balance is weak.

As the cost increases, the low end yarn with more cotton is pferred to foreign countries, and domestic cotton is reduced. In the downward trend of prices, enterprises maintain the attitude of purchasing with the purchase and reduce the stock of raw materials as far as possible, so as to prevent losses.

At the same time, under the current industrial environment, cotton pricing power is shifting from upstream to downstream, textile mills are in a strong position, bargaining power is strong, and demand is enhanced.

These are all constraints.

Factors.

In addition, structural contradictions in spot trading this year are particularly prominent.

The cotton price difference between high and low grades is widened.

Storage and storage for several years led to the poor quality of domestic cotton, including the quality of Xinjiang cotton was not as good as imported cotton.

Therefore, although the domestic and foreign cotton price difference has returned to the normal level before, but from the perspective of price and quality, domestic cotton does not have a specific advantage. It also means that the difference between the domestic and outside cotton prices may not be applied anymore, and the cotton price inversion will not be ruled out in the medium term.

But in the short term, cotton prices can be supported in the normal range of costs and spreads.

From a futures perspective, the current premium setting is more conducive to cotton delivery with slightly inferior quality, so the quality of cotton represented by futures can not attract textile mills.

If there is a certain profit in the futures market, it may be a choice for many cotton traders to sell on futures.

However, considering the cost of warehousing and capital, the price of the main contract is not profitable at present.

In general, the current macro stability, no systemic risk, countries to relax efforts; basically, the Corps price, India purchase and storage led to a weak spot balance, futures disk no margin profit, therefore, the price will continue to maintain the pattern of shock, after the Spring Festival textile enterprises in the demand for replenishment may be strong trend, but the big pattern is still weak, we focus on India throwing storage situation, in addition, early February will announce the United States cotton next year cotton planting intention, will also have a greater impact on the market, it is expected that the trend will be high in February.