Focus: After the cotton market scenery is tangled

“From last year till now, the price of cotton has fluctuate so much, and now our business situation is not particularly good. Because cotton prices have fallen, we now have a lot of stocks acquired at high prices that have not yet been sold. And now the downstream cotton textile The cotton demand of the company is not very strong.” Mr. Zhang, head of Nanyang Cotton Industry Group Co., Ltd., told the First Financial Daily “Finance” reporter.

According to the reporter’s understanding, Mr. Zhang is nothing but trying to sell cotton, which was bought at the high price of about 29,000 yuan/ton at the end of last year, to a cotton textile company at a higher price than this, but this is counterproductive. Mr. Zhang himself also pessimistically believes that this year's cotton price is unlikely to return to the level of last December.

As of Friday's close, Zhengzhou Exchange Cotton 1109 main contract closed at 28,170 yuan / ton, in February more than a month after the creation of a high of 34,870, has accumulated a drop of 23.8%.

The spot demand for cotton has weakened compared to last year's skyrocketing price. The current buoyant market may be described as being calm, while the cotton spot market is also devising a picture of the icy and irrelevant days opposite to the unusually popular one last year.

Hongyuan ** analyst Wang Yong pointed out that the atmosphere is a gradual process. The increase in cotton prices was affected by the gap between supply and demand, and the dominant factor in the market has now been quietly changing, indicating that cotton textile companies are indeed in a very bad situation.

“Now the desire of small and medium-sized cotton companies to purchase is not strong. Compared with the stage before the company was in procurement, the company is currently in a destocking cycle. And now the quality of cotton is relatively poor, coupled with relatively high prices, so it is very cautious to purchase now. "Nanhua** analyst Fu Xiaoyan told reporters in this way.

Wang Yong further pointed out that the situation in the spot market is actually the result of the Khmer price being transferred step by step. Cotton is indeed a relatively volatile species. The large fluctuations in the market price of cotton in the market place will bring a certain degree of psychological tremors to the spot dealers. This kind of volatility brings some uncertainty to the spot dealers. The wait-and-see attitude was also formed.

Dong Shuzhi, cotton business manager and senior cotton analyst at Peking University Founder Group, pointed out that the impact of the previous reciprocal reciprocation of the ***, the earthquake in Japan, and the recovery of the global economy are not so ideal. Now the downstream sales of cotton spinning are not very good. . This shows that the textile companies have reduced their orders.

Due to the decline in the willingness of cotton textile companies to buy, it can only make cotton buyers like Mr. Zhang themselves to bear the losses caused by the decline in cotton prices. Mr. Zhang told reporters that his company still has nearly 1,000 tons of cotton, and he has also made hedging in the ** market. However, due to the tight capital resources of companies, the effect of hedging cotton prices is also limited. .

Cotton ** Stronger, weaker, weaker, stronger, weaker, and weaker At present, both the cotton ** on the Zhengzhou Exchange and the cotton on the American Intercontinental Exchange (ICE) can be divided into two categories: the far month contract and the recent month contract.

The domestic 1109 main contract corresponds to the 2011 old cotton, and the far month 1201 contract corresponds to the newly listed cotton next year. As of Friday's close, the spread between the two contracts reached 2,690 yuan/ton, and the spread between ICE's cotton near-month and far-month contracts also had a near-strong-to-weak situation. However, the spread of ICE's spread was far greater. Cotton at the Zhengzhou Exchange.

As for why this phenomenon appears in the market, Wang Yong told reporters that the supply and demand gap of the previous month's contract has long existed, and the far month contract is showing a weaker result than the recent month contract due to the impact of the expansion of cotton production expectations. .

The National Development and Reform Commission issued the “2011 Preliminary Cotton Storage and Receipt Plan” on March 30th, which was interpreted by the market as stimulating the enthusiasm of Chinese farmers for planting cotton and stabilizing the cotton planting area, which may cause some negative development in the future market. The plan decided that the temporary storage price from September 1, 2011 to March 21, 2012 was 19,800 yuan/ton.

At present, there is obviously a situation of weaker, weaker, and weaker domestic and foreign cotton contracts. Wang Yong pointed out that the main reason for presenting this pattern in the near future may be that the cotton acreage expected by the Ministry of Agriculture of China and the China Cotton Information Network has expanded by 5% to 10%, before the USDA announced that the planting area was expected to expand. The market's expectation for this data is about 20%. This is also one of the main reasons why the ICE cotton far-month contract is far weaker than the near-month contract. Coupled with some analysts' expectations, if the weather conditions in major producing countries such as Pakistan, India, Brazil, and China are favorable, the global cotton supply shortage situation should be eased by 2012, so prices may fall by half.

However, according to the United States Department of Agriculture (USDA) on Thursday announced that the United States 2011 cotton acreage is expected to be 12.566 million acres, an increase of 13.8% from 11.04 million acres planted in 2010, far below the analysts' average forecast of a 20% increase .

Under such a bullish data, the ICE May contract rose 7 cents to touch the daily limit. As of the close of March 31, the cumulative increase of 38.3% in the first quarter of US cotton was the best performing product since 2010.

Waiting for the peak demand season in June From the current trend of cotton, Fu Xiaoyan believes that within a short period of time, it still needs to undergo a period of adjustment. But it's hard to reproduce the crazy situation of last year. There is no definitive answer for the analyst on whether the pattern of weak cotton in the future has already formed.

Dong Shuzhi believes that it will not be seen until May. Since April-May is a busy season for textile companies, since then companies have to prepare for the production of summer clothes, and this year's overall elasticity of cotton consumption should be relatively large.

"SMEs are still in a wait-and-see state. If we say that textile companies will have a need for stock-restocking in May-June, then if demand comes up, cotton prices may rebound again." Fu Xiaoyan believes that "downside shocks have fallen below." The possibility of 28,000 yuan is not big. It is expected that this year's cotton price will remain at a high level and fluctuate, after all, there is still a gap between supply and demand.There is also some pressure to break through 30,000 yuan upwards, but if we can break this threshold, the downward trend will be Change immediately."

Which price is the reasonable range of cotton, Wang Yong believes that, after all, with the increase in planting costs, cotton has been difficult to return to its previous low.