Rising Prices Of Substitutes Will Help Stabilize Cotton Prices

Driven by the general trend of commodity market,

The price has recently risen sharply, and the main contract has been on the market for 1609 Monday. Although it failed to close the market, the impact on market sentiment is not to be overlooked.

In the short term, the market bull mood gathering, coupled with the promotion of commodity inflation, it is expected that the rebound trend of zhengmian is expected to continue.

But in the long run, before the stabilization of the national stock and the stabilization of the bottom of the cotton price, the long bear market of cotton will have to wait for a long time before it can be fundamentally reversed.

The spot market is still weak.

At present, domestic cotton

Still weak, spot prices continued to slump.

As of March 7th, China's cotton price index 328B reported 12020 yuan / ton, hitting a new low in the past 5 years.

In the northern Xinjiang, the 3128 grade machine picked cotton fell below 11000 yuan / ton, and the quality of some products was generally low to 10500 to 10800 yuan / ton.

At present, most businesses lose nearly 1000 yuan / ton, but in the expectation of dumping, most businesses are still cleaning up their inventory.

The pressure of spot selling causes

It is more difficult to stabilize and pick up in the short term.

It is expected that not only will domestic cotton prices become pressure, but also the negative impact on international cotton prices will be huge.

According to the ICAC3 monthly report, China's 2015/2016 annual carry over inventory is 12 million 20 thousand tons, accounting for nearly 60% of the world, and the sink to consumption ratio is 170%.

There should be about 90% of the national stock in these stocks. Therefore, the news of the national reserve and storage will have a greater impact on the market.

Decline in planting intention leads to further decline in production

The domestic cotton planting area is declining obviously, which is expected to reduce the domestic cotton output this year, or to form a more profitable support for the price.

In 2016, the national cotton planting area survey showed that the average cotton planting intention decreased by 11.6%, which was 1.47 percentage points lower than that of the previous survey. According to this estimate, it is estimated that the area of cotton planting in the whole country will be 42 million 570 thousand mu in 2016, and the output will be reduced to about 5 million 200 thousand tons, or 20%.

At the present stage, it is in the stage of structural adjustment and pformation of domestic agriculture. For the sake of protecting advantageous agriculture, the State implements a subsidy policy for cotton, while protecting the interests of farmers, it helps to optimize domestic cotton planting, improve cotton quality, and implement the supply side reform with high quality and high price.

It is of great practical significance to use the futures market to guide and assist the policy.

Once the impact factors reach the consensus of the market, they will have a major and fundamental impact on the market.

In recent weeks, the price of polyester and viscose fiber has gone out of the market in recent weeks. The price of polyester staple fiber 1.5D and viscose staple fiber 1.4D rose from 12150 yuan / ton and 6140 yuan / ton before the Spring Festival to 13220 yuan / ton and 6480 yuan / ton, respectively, up 8.7% and 5.5% respectively.

The rising price of chemical fiber will make its spot replacement drop, and it will play a supporting role in textile prices, especially the cotton yarn prices of downstream cotton products.

However, at present, this effect is weak, cotton yarn price trend is still relatively low.