Cotton: 24000CNY/t Preliminary Confirmed
Author: May 16, 2011 13:28
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We believes, the recent main contract CF1109 price is maintained at 24180CNY/t, and it will increased to 26600CNY/t follow up, but it is hard to break through 28000CNY/t.
--Textile export situation is good. According to customs declaration statistics, textile and garment export in April is $19.875 billion, link relative increased greatly by 19.95%. It a fruit under the situation of RMB appreciation, labor cost increase, credit cost increase and international market competition intensified. Cotton futures can described as a timely rain after the drought, as one of the main factors for cotton futures stocks increase and rebound.
According to the data of the just closed Canton Fair, middle and short term order occupies 90%, and long term order occupies 10%. Buyers still have some concern on the aftermarket, placing order prudently. Export enterprises worry about policy adjustment and cost increase, dare not accept long term orders. Apparently on textile and garment industry, and the recent export tax rebate rate lowering rumor once again bother relative enterprises.
--Textile enterprise digest inventory. The monthly magazine of China Cotton Association reported on 10th that by the end of April, 2011, the inventory turnover of commodity cotton is 1084 thousand tons, decreased 184 thousand tons on link relative basis, and decreased 541 thousand tons on year-on-year basis. It was mainly resulted from the fluctuation of cotton price, credit policy tightening and various cost increase factors, textile enterprises dull sale. People want to wait and see on ginned cotton procurement. Spot goods market sales slack. For the huge cotton stock of weaving plants in the former period, now it becomes urgent to digest the stock, and also the downstream cotton stock is waiting to further digest. Whether the digesting of cotton or other downstream products smoothly or not, it will determine the room of cotton futures price to rebound.
--Spring sow and climate influence cotton price. According to ministry of agriculture, by 6th May, the national cotton cultivation has 91.4% completed, 0.7% faster. The national meteorological center reported that cotton cultivating area temperature is expected to be a little higher than previous years in May, and the heat is favorable to cotton growth. But rain will be less in cotton area, which will make some influence on cotton growth. Following up, cotton area weather change is worth to pay some attention. In addition, according to the report of cotton sowing progress, by 8th May, the 15 cotton producing states have started sowing and the national progress is 26%, 8% slower than last year, 7% slower than the last five years averagely. Whether cotton can stop drop to rebound up, it is mainly determined by the spring weather.
--Focus on dollar and bilateral market. Recently, the financial market changes greatly. First, it was the price slump of silver after the death of Bin·Laden. The CRB index, which is on behalf of the 19 kinds of international bulk goods trend, stoped at the point of 369 and rebounded at the point of 337. U.S. dollar index rebounded at the middle index of 72.5, now it is at 75 point, and it is expected to stop at 75.63 point. And the recently revealed debt crisis between Greece and Ireland created a good chance for U.S. dollars to rebound up.
We believe, the bull market situation has not fundamentally changed before the end of quantitative easing policy of the Federal government. If gold and crude oil price go up, cotton futures price is impossibly to go down. On the contrary, cotton futures will see in the small rebound. (The article just stands for the author’s point of view, not stand for this website)
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Editor: Candy From: 168Tex.com
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