Recently, Zheng cotton close to 14500 yuan / ton in the vicinity of the support after a rebound again, the performance is still strong. The main reason is not a large concentration of cotton market, tight supply and demand situation has not fundamentally changed, because of the high cost of cotton spot is still strong, American cotton exports strong to withstand the pressure to restore supply temporarily. But we expect the support of the subject matter of the previous follow-up is difficult to continue. With the new cotton listed to increase supply, domestic demand will present the stage loose. The high cost of the new cotton spot market early, very strong psychological price of cotton farmers and traders of cotton processing enterprises, harvest phenomenon obviously, lead to higher cost. Even if the current Southern seed cotton purchase price in 7.15 yuan / kg, according to the cotton price 2.45 yuan / kg, a processing fee of 1000 yuan / ton, excluding the loss, reduced lint costs about 15500 yuan / ton. In the new cotton market overall quantity is limited, the cost of the market support. But with the recent cotton amount gradually, seed cotton purchase prices began to decline, and the acquisition of cotton textile enterprises and enterprises attitude change, with different pre purchase price rush in relatively cautious, only to maintain the volume of purchase to spread costs. The downstream enterprise procurement, mostly inquiry, mainly due to the early textile enterprises through the country has taken a certain amount of storage of cotton, individual enterprises can be maintained until December, not a lot of other country store inventory of textile enterprises in the yarn price rise kinetic energy shortage, with the buy. Thus, the cost side of the support in the gradual weakening. Domestic supply and demand expected partial easing of the current domestic cotton market supply, including cotton state reserve auction and import. The supply side, last year carryover inventory of about 300 thousand tons, 4 million 600 thousand tons of cotton production at this stage, the import is relatively high, according to the annual imports of 50%, about 450 thousand tons. The demand side, by the end of October, cotton sales of about 200 thousand tons, plus the subsequent 4 months downstream demand is expected up to 2 million 400 thousand tons. National storage wheel, not more than 30% of the previous annual growth rings, up to 800 thousand tons. Supply a total of 5 million 350 thousand tons, the demand for 20+240+80=340 million tons. By the end of February, the stock is 1 million 950 thousand tons, or even higher, and supply and demand can be said to be not tight, the market as a whole under pressure, need to pay attention to the rhythm of the wheel into the market and the impact of short-term support. After entering the stage of market risk and uncertainty in cotton storage, storage throwing storage time, add up storage delivery schedule if you like this year is relatively slow, average monthly supply of 530 thousand tons, 100 thousand tons per month when demand gap to cotton to the annual inventory balance of 1 million 350 thousand tons, stock consumption ratio is less than 20%. This stage is tight supply and demand does not exclude the trend, of course, depends on the specific country specific trends when storage auction.
Lack of energy in the international market
Early U.S. cotton exports are relatively strong, the market was formed to support the recent U.S. cotton exports began to slow down. According to the U.S. Department of agriculture data, as of October 20th week, the U.S. net exports contracted 2016/2017 annual upland cotton 29325 tons, fell 62% from the previous week, 4 weeks compared with the mean decreased by 37%; the annual shipment of upland cotton 28826 tons, down 1% over the previous week, close to 4 weeks average drop of 21%. Recently, India cotton prices continue to decline, the Asian exports began to have certain advantages, the United States exports occupy a certain extent stage. At present, domestic cotton yarn and cotton yarn spreads in India up to 1000 yuan / ton, cotton imports also have certain expectations, to a certain extent also occupied the domestic demand for cotton.
Overall, the short-term market is still relatively strong, but is expected to rise, with the new cotton market increases, the market supply and demand easing, prices or face a certain degree of adjustment, and follow-up before and after the state reserve auction to effectively increase the supply of the previous period, the market supply and demand is expected to have tight stage, then the market may be expected to rise. Operation, short-term rebound towards high performance, focusing on the top, not on the break to adjust the basic establishment, short rallies.