Zhengzhou Cotton lack the power to rebound,Investors have the tendency to keep a short position

Zhengzhou cotton future appears the sign lack the power to rebound and go fast to the downside at the end of the day. This month, 1109 contract drop 355 Yuan/Ton, the, range of a price drop is 1.66%, end up with 21040 yuan/ton. The main force 1201 contract end up with 21620 yuan/ton, drop 195 yuan than yesterday. The range of the price drop is 0.89%. To see the open interest, there is a apparent evidence to remain a short position or close the position.. The entire open interest is 600 thousand hands, drop 55 thousand hands.In the situation that nothing changes in the fundamental , the Zhengzhou cotton may drop again, investors have the tendency to keep a short position.

Recently,commodity market warms up slightly., but to see from the middle-long period ,after Chinese economy developed rapidly for 30years, we need to slow the step to keep the balance in every aspect. The government has showed their attitude to put the stability of general level of market price in the first of  macroscopic readjustment and control. In this case, the regulate and control policy won’t loosen in the next half year.
    Cotton’s spot good(21050,-345.00,-1.61%) price is quite steady, purchasing price of domestic level 3 cotton maintains at 22000 yuan/ton. Spot goods 1109 contract price end up with 20150 yuan/ton in the domestic cotton trading market, drops 800 yuan than the end price of future 1109 contract. Index of Chinese cotton is 20281,drop 202 points than yesterday.
    In the downstream, cotton yarn keeps still, the confidence of the market is hard to recover in the short time. 32 pure cotton yarn price is 27000yuan/ton-28000yuan/ton. the overall weakening trend is not changed.

According to the U.S. department of agriculture announced in July, next season, cotton supply and demand estimates to eased. We except that global cotton output will reach to 26815 thousand ton in 2011/12 year, the golbal consume is 25419 thousand ton,the final Global stock increased to 11.104 million tons , adds to 599000 tons. The Global stock final consumption is 43.68%, higher than the 2009/10 and 2010/11 year.

In a sum,  though The cotton futures price slightly stabilized, but strong pressure left. so we  maintain the tendency to keep a short position.