Fundamental warming cotton prices will continue the rally

Editor's note: At present, the world economic situation is improving, domestic cotton spot prices have risen steadily, yarn prices have risen slightly, orders for downstream apparel companies have increased, and Zheng cotton fundamentals have been warmed up.

At present, the world economy is in a good position, domestic cotton spot prices have risen steadily, yarn prices have risen slightly, orders for downstream apparel companies have increased, and the fundamentals of Zheng cotton have become warm.

After the Spring Festival, under the influence of loose domestic policies and improvement of demand, Zheng Cotton went out of the oscillation and climbing market. At present, the world economy is in a good position, domestic cotton spot prices have risen steadily, yarn prices have risen slightly, orders for downstream apparel companies have increased, and the fundamentals of Zheng cotton have become warm. The author believes that the US Department of Agriculture report will soon be released, and the possibility of a reduction in the supply of new cotton will be greater. In addition, the resumption of purchases and the return of funds to market interest will pick up, and the pace of Zheng Mian’s price rise will not stop, and will continue to rise after a short-term accumulation.

The economic situation is improving. The recent improvement in the employment situation in the United States and the factory order index has given the market greater confidence and the expectation of a rebound in consumption has increased. As a result, commodities have picked up collectively. The slowdown in the growth rate of China's economy is also slowing down. Under the influence of spring and holiday factors, a number of domestic industries have shown rapid growth and consumer demand has picked up. If the increase in CPI stayed at 4.1% in January, the domestic inflation situation will continue to ease, and the time window for RRR cut will open again. In addition, the government has increased support for small and micro enterprises and provided new opportunities for the development of small and medium-sized textile enterprises.

The demand for textile companies slightly improved Before and after the Spring Festival, the orders of downstream apparel companies increased slightly, yarn demand rebounded, and cotton consumption of textile companies continued to improve. China’s PMI in January was 50.5%, which was a 0.2% increase from the previous month. The export orders index for the textile and apparel industry was only 46.9%, and the new orders index was higher than 60%. The above data shows that China's manufacturing industry is slowly recovering, among which domestic demand for textiles has rebounded strongly, but international demand remains weak. In view of the weak demand from Europe and the United States, garment companies have to improve their marketing strategies: on the one hand, they increase the number of domestic sales, the proportion of domestic sales has increased substantially, and they are expected to reach 80%. On the other hand, while ensuring the sales volume in Europe and the United States, they will expand the market share in Asia, Africa and Latin America. . The increase in orders for apparel companies will drive sales of yarns, which will increase the output of textile companies and will play a good role in the restoration of the industrial chain.

The tight pattern of supply and demand or the recurrence of unilateral decline in cotton prices in 2011 has impacted the enthusiasm of cotton farmers worldwide. According to the ICAC report, the global cotton planting area will decline by about 8% in 2012, the total production will be reduced to 24.9 million tons, and the consumption will be 24.31 million tons. The tight balance of global cotton will reappear. From the domestic situation, the increase in labor costs and the decrease in the ratio of cotton planting income have hampered the enthusiasm of farmers for planting cotton. According to the survey, China's cotton planting area will decline by 9% in 2012 to 72.16 million mu, and the estimated output is 6.5 million tons. Combined with 3 million tons of imported cotton, the total supply will be 9.5 million tons, and the total demand is estimated to be 958. Ten thousand tons, the tight supply will continue to support cotton prices continue to rise.

The interest in capital market has obviously risen. After the Spring Festival, the national policy was relaxed and the capital flow was abundant. The interest of investors in the holding position obviously rose. As of February 7th, the total position of Zheng cotton was 369,000 lots, an increase of 35% from the beginning of the year, and the volume of transactions on one day was 367,000, which also showed a trend of slow amplification. There are many bullish factors in the near term. U.S. employment data is positive. Australian floods and the forthcoming US Department of Agriculture's supply and demand report have provided good themes for the speculation of funds. The area of ​​late cotton planting and the new year's collection and storage will also be of concern to the market. Hot spot.

From a technical point of view, the Zhengmian shift warehouse was basically completed in the month of exchange, and the CF1209 contract became the main contract. The futures price continued to move upwards. It was close to the Bollinger Band upper channel, and the moving averages were long, and the slope of the upward trend line gradually converged to 45 degrees. K The entity of the line is obviously enlarged, the warehouse volume continues to increase, and the medium and long-term gains are clear.

In summary, the recent improvement in the economic situation and the recovery in spot demand led to a slight increase. At the same time, the recovery of interest in capital has also accelerated the rate of increase. The current price difference in Zheng cotton has been expanded. This week, the US Department of Agriculture’s supply and demand report will be announced. It is expected that the futures price will oscillate slightly, and the potential price of the reserve will continue its upward trend. The target price of CF1209 is 23,400 yuan.