Reasons For Importing Cotton From China Textile Mill

< p > ICE cotton futures -- the first half of this week is characterized by the continued sluggish trading, the price lingering around 77.50 cents, the volume narrowed, and the rolling out of the -3 month contract in December basically ended.

However, yesterday's strong market morning, once cleared the recent resistance, activate a series of stop loss buying.

The market price rebounded 200 points from this week's low point, but close to the close, the market dropped and rebounded most of the gains.

Whether the market behavior is technical or fundamental, there is controversy.

In fact, recent price behavior is clearly divided from energy shocks.

For example, RSI and random index show (for example, price innovation is low, RSI / random index is not).

Many times, this situation indicates that this dynamic is about to end, at least temporarily, and then there will be a stage of corrective action.

It is rumoured that China intends to postpone its reserve cotton sales plan until December or January, which seems to explain some of yesterday's market developments.

As mentioned in the previous report, the large price difference between China and foreign cotton prices is still a supporting factor. The current price is relatively close to the level of import cotton plus 40% tariff. For China's a target= "_blank" href= "//www.sjfzxm.com/" > textile < /a > factory, they begin to feel the reason of import (based on the assumption that the selling price of reserve cotton is 18000 yuan / ton).

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< p > technical aspect: there has been no significant change compared with last week.

The main trend is bearish, but it is likely that upward corrective action will take place.

The support level is 77.50-77.00 cents, and if it goes down, the lowest support will be 75 cents.

The short-term key resistance is 80.50-81.50 cents.

If the closing price is above 84 cents or the value is stabilized by 84 cents, it may negate the current bearish figure.

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< p > USA -- as the end of the calendar year, planters have begun to plan for the 2014/15 crop year.

For those cotton growers with multiple crop selections, the cotton trade level in December 14 years is lower than 80 cents, which is not enough to attract more arable land.

On the other hand, the new harvest price of competitive crops, such as soybeans and corn, is also lower than that at the beginning of 2013. Next year, all major commodities may not be as good as the previous year.

For a long time, the United States has not experienced such a situation, that is, no commodity is outstanding.

Of course, because of the huge global inventory, especially China, the problem still exists, that is, how much cotton is planted, how much production can be digested by the market, and how to keep the price at the present level.

In contrast, the cotton trade level for the 13 year December was close to the same level in the same period last year.

Unless there is a big rebound from now until next spring, the planting area will almost be predicted to be more or less similar to that of the 2013/14 crop year.

Furthermore, even if some people stick to cotton, we should not expect growers to make long-term sales unless new cotton prices rise at a level above 80 cents per pound.

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< p > China - after failing to break through the short-term resistance level of 18700 yuan (14 year May contract) last week, the < a href= "//www.sjfzxm.com/news/index_s.asp" > market < /a > fell to the contract life cycle low of 18 '265 yuan.

However, prices failed to get a firm foothold at the new level and rebounded quickly, smoothing the losses at the beginning of the week.

Therefore, the near-term and long-term prospects remain neutral.

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< p > this week, the spot market is in general contemplation. Trade is still waiting for the reserve agency to announce the next round of sales auction.

All kinds of hearsay can be heard in the market, especially one of the hearsay that led to a strong domestic cotton market yesterday.

We have heard that more and more traders are waiting for the import of cotton at a tariff of 40%, but the international and domestic prices have not yet been fully reduced to the level of permitted pactions.

After the start of this round of acquisition of cotton reserves, the progress of the acquisition has improved significantly. The total amount of acquisition yesterday was 610000 tons, or about 20% of the total number of acquisitions acquired on the same day last year.

Zheng merchants certified 175 stocks, 31 hands to be examined, compared with last week no change.

Last week, after China's yarn production reached a record high, this week announced that the output of a href= "//www.sjfzxm.com/news/index_c.asp" > cotton < /a > was the same as that in October, an increase of 5.7% over the same period last year.

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