资讯 1 10 英文网 297 Monthly 591114 CNCotton Monthly Report (Jan) 2020-01-17 14:01:30 yangfang
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CNCotton Monthly Report (Jan)
2020-01-17

Domestic cotton prices have risen rapidly and it needs to be alert to the risk of falling  

 

(I) Supply pressure has eased and domestic cotton prices have risen rapidly. The supply pressure of domestic spot has eased under the dual effect of storing reserve cotton and warehouses receipts registration of operation enterprises, and prices Zhengzhou cotton futures have risen rapidly. According to data from national cotton market monitoring system, as of January 10, 2020, seed cotton equal to 5.750 million tons of lint cotton was sold in the whole country, a decrease of 58,000 tons year-on-year, a total of 2.476 million tons of lint cotton was sold, an increase of 818,000 tons year on year. 

 

(II) Fund drives Zhengzhou cotton rapidly, and the risk of falling recently is large. Fund begins to enter the market on September 30, the holdings of Zhengzhou cotton dominant contract have increased to 615,000 on January 13 from 127,000, and prices have risen to a high level of 14,450 Yuan/ton from 12,420 Yuan/ton. As the price of Zhengzhou cotton futures has risen rapidly, most operation enterprises hedge at the high price. As of January 15, there were 31,462 Zhengzhou cotton futures warehouses receipts, an increase of 12,037, up 61.9%. From the perspective of price difference between domestic and foreign cotton, for the past two months, the growth rate of Zhengzhou cotton futures in the early period has been significantly less than that of ICE cotton futures,. However, it has risen rapidly from December 4, and the price difference with foreign cotton spot has narrowed obviously. On January 15, after Zhengzhou cotton dominant contract experienced a significant decline for two trading days, the price was still higher than the average price of imported cotton spot (calculated on 1% tariff), and the possibility of falling cannot be ruled out. 

 

(III) The long holiday for the Spring Festival is approaching, textile enterprises are cautious about storing. Driven by the rise of cotton price in the early period, the quotation of pure cotton yarn has risen, and textile enterprises are cautious about storing. According to the sampling survey of the national cotton market monitoring system, the national cotton industry inventory was about 663,000 tons, up 16.2% month-on-month and down 25.6% year-on-year. As the long holiday for the Spring Festival is approaching for the textile market, 47.3% of the enterprises choose to purchase a small amount of cotton raw materials to meet the operation after the Spring Festival. Inventory of enterprises’ finished products has declined, but the decline is not large. At the beginning of January, yarn inventory of the sampled surveyed enterprises has decreased by only 3.4 days. The actual orders have not increased obviously, terminal demand is still weak. For the past two trading days, Zhengzhou cotton futures has fallen significantly, which causes textile enterprises to wait and see, so we need to pay close attention to its impact on the next trend of cotton prices.