Cotton Is Unlikely To Rise Substantially In The Future.

The weakness of European and American economies will seriously affect domestic exports, which is reflected in the terminal demand. The Canton Fair has always been a barometer of domestic demand for foreign trade. It is understood that the number of people entering the Canton Fair on the first day of this year is 20% lower than that of last year, and the orders from Europe and the United States have also decreased significantly, indicating that the demand for foreign trade is not optimistic.

The demand for foreign trade is weak and domestic

This year's cotton production is a big backdrop. If the year of high yield meets the favorable environment of the economic boom, there will not be much restriction on the market in the overall bull market atmosphere, but if the supply is loose and the demand is weak, the pressure of the fall will be greater.

After a slight improvement in yarn demand in September, it became depressed again in October, and the stock began to increase again. The cotton mill reflected that the downstream orders were scarce, and the cloth factories purchased on demand.

In the case of bad sales, the cotton mill is also on demand, and the general stock will not exceed 15 days. On the choice of varieties, it is inclined to use the outer cotton. The India Shankar 6 M grade cotton is currently only about 18000 yuan / ton, and some cotton mills have procured cotton with a cost of 18000 to 19000 in the early stage.

At present, the price advantage of cotton is obvious.

In the middle of October, the new cotton market should have entered the peak period, but the actual situation is that the cotton ginning factory is unwilling to purchase, and the farmers are reluctant to sell because of the low price.

Data show that the current domestic picking rate has exceeded 60%, but the acquisition rate is still less than 30%, the reason behind this dilemma is that although the purchase price of seed cotton has now dropped to 4.2 to 4.3 yuan / kg, the cost of lint is still over 19000, higher than most of the cotton price, and textile mills have low purchasing intention.

Storage becomes the main new cotton.

Seed cotton prices further slide down 0.1 - 0.3 yuan will break the deadlock, the profit margin of the storage will be opened and then stored, and some of the cotton will enter the national reserve. The pressure of increasing production will be partially eliminated, and the downward pressure on cotton will be eased.

On the one hand, Zheng cotton will not be too big to fall, and the discount will be too deep. The arbitrage space for futures and storage will be opened. Therefore, there is no risk of a fall in Zheng cotton. The 19000 point is basically the limit position.

On the other hand, high yield, low downstream demand and tight financial constraints restrict the possibility of a sharp rise in cotton prices. The total will be around the 19800 oscillation of the purchase and storage price.