Technical Correction Cotton Prices Temporarily Warmer

Speculative fund buying to boost 1 days

The US market was sharply higher on Wednesday.

Investors predict that the European debt crisis may usher in a new turn. The economic data of the US, China and Europe are all very strong. The positive assessment of the Federal Reserve's economic situation is also a great comfort to speculators.

Yesterday's domestic PMI index data released in November showed a 55.2% increase of 0.5 percentage points over the previous month. This is the fourth consecutive month that the index has maintained a moderate upward trend, indicating that China's macro-economic development momentum is good, and it also has a certain effect on the rise of market confidence.

But the CPI in November remains to be made clear. The market's concerns about the tightening of the policy are still there. In the short term, it is not clear that the market will reverse in the short term.

It is understood that with the slight rebound in the futures market for several consecutive days, the domestic cotton seed sale price has stabilised in the early stage after the sharp fall, but the mentality of selling the spot market is aggravating again. According to a purchasing company, the acquisition of new flowers at around 3 level in Shandong is basically more difficult, and the level of 5 is relatively better. The source said that the current acquisition of the manufacturer still had no meaning of buying at full volume, and generally speaking, the acquisition market was still at a relatively low temperature.

In terms of imported cotton, the quality of the goods currently arriving in Hong Kong is not ideal, and the situation of doping and shortage is more serious.

Downstream textile enterprises, market distributors, small and medium-sized textile enterprises pure cotton yarn prices are frequently fluctuated, but the large textile enterprises quoted price of cotton yarn has not fluctuated significantly, only in the actual paction of different customers to set a little profit margin action, its profits still maintain considerable.

Market participants believe that short-term policy regulation and phased supply increase will affect the pressure on cotton during the period, but in the medium term, the pattern of supply and demand in the latter part of 2010/11 is still more intense, which will once again effectively stimulate cotton prices to pick up.

According to China's weather network 2 reported that in the next three days, the northern part of Xinjiang, the northeast of Tibet, the middle east part of Inner Mongolia and the northeast part of China have small to moderate snow (rain) or sleet. Among them, parts of northern Xinjiang, Heilongjiang Middle East, Jilin and the Middle East have heavy snow and local snowstorms; there are light rain or showers in the southern part of Sichuan basin, Western Guizhou, Yunnan and Eastern Hainan.

Today, North China and other places will be exposed to gale weather, and the fog that has entrenched will be dispersed.

To sum up, Zhai Naigang, an analyst, believes that although the shortage of cotton continues to support cotton prices, there will still be high opportunities for cotton prices. However, in view of the domestic policy's repeated suppression, it will still be difficult for the cotton market to turn up a sharp reversal signal. The rebound in recent two days is mostly due to the technical correction of the previous sharp fall. On the whole, the cotton market is still suppressed by the policy.