US cotton supply tight Zheng cotton hard to return

Intercontinental Exchange ICE cotton rose to a two-year high on the 25th, compared with the US cotton, Zheng cotton ** seems to be weak and difficult to return. However, analysts pointed out that there is limited room for Zheng cotton prices to fall sharply. After the so-called bad-cotton direct subsidies policy announced, the Zheng cotton price will rebound slightly in the second quarter.

US cotton stocks fell to record lows The US Department of Agriculture (USDA) report predicts that US cotton production this season will be 12.87 million bales (480 pounds per bale), which is about 13.19 million bales lower than 2013/14 cotton crops previously estimated. 2.5%. This will result in about 2.5 million bales of US cotton at the end of July, the lowest since 1990/91.

The tight supply of US cotton has been an important factor supporting the recent month's contract. It is expected that the US cotton futures contract will continue to maintain a strong pattern. However, this wave of rally started from the end of November 2013 has little to do with China, which is ultimately related to its own inventory.

In addition, the recent weekly export sales data shows that US cotton exports are in good condition. As of March 13, US cotton net contracted 13/14 cotton accounts for 91% of the estimated total exports, which is close to the five-year average of 93%. In the 12/13 year, only 89%. The non-shipment volume was only 661 thousand tons, which was lower than the five-year average.

The sales of US cotton in 2013/14 are relatively good, so it is also possible for China to perform its own business in the case of a bad match in China.

From a technical point of view, the May contract has broken through the early shock range, the highest price rose to 95 cents or so, because the fundamentals have been very difficult to see the US cotton price in space, so at this moment the need for technical signals to signal a turn, the current From the perspective of the United States, cotton shocks are difficult to change upwards. In addition, the short-term impact on the US cotton is estimated at the end of the new year planted area announced, so even if you want to enter the market to do it, but also need to wait for the report to issue a decision.

Zheng cotton "weak" compared to the United States and cotton prices to destocking, Zheng cotton continues to fall, affected by the negative effect of cotton direct subsidies, Zheng cotton prices fell more than 17% this year. On the spot, on the 25th, the Chinese cotton price index 3128B cotton reported 19414 yuan, down 3 yuan from the previous day.

Industry sources said that after only three years of open and unlimited storage, China’s acquisition of companies has lost sales channels, while the rapid development of machine-picking cotton has led to a decline in the quality of cotton in Xinjiang, cash spot trading mode behind imported cotton L/C model, After the new year's loss of support for storage and storage policies, domestic cotton prices will be brought closer to international cotton prices under the pressure of sales, and domestic cotton prices will not be excluded from the cost of imported cotton.

Domestic cotton is affected by the huge stocks of state-owned deposits and future subsidy policies. The recent news that starting April 1st to adjust the dumping policy, first throw the reserve price down to 17,250 yuan per ton.

Fu Xiaoyan said that from the perspective of the Xinjiang cotton to be sold and imported cotton, the quality of the cotton is just a lot higher than before. Then the actual cotton cost of the company will not be too low. Due to the narrowing of the domestic and foreign price gaps, the import of cotton is not too profitable. Therefore, the degree of active bidding will be higher, which will help the State Reserve to inventory.

Industry sources have revealed that at present, the State Reserve has nearly 10 million tons of cotton in stockpiles. "Since the previous year, the state began to collect and store. Basically, 95% of the cotton production has been handed over to the State Reserve." However, Zheng cotton prices have fallen sharply and space is limited. After the shortfall, the price will pick up slightly.