Cotton Prices "Late Spring Cold" Before The Market Turnover Is Still Light.

Yesterday, Zheng cotton main 1509 contract shock fell, the lowest level fell to 13140 yuan / ton throughout the day, at the close, compared with the previous trading day settlement price fell 85 yuan / ton, positions increased by 1 to 211450 hands.

Analysts said that despite the gradual recovery of cotton enterprises and the expected reduction in planting area,

Market turnover is still slack, and downstream orders are not good.

The intention of replenishment is not strong, and cotton stocks are high.

In terms of foreign markets, the latest data released by India cotton Federation (ICF) show that up to now, the seed cotton market in India is about 5 million 703 thousand tons, and the India Cotton Corp (CCI) has acquired a total of 1 million 360 thousand tons.

ICF said the total cotton output in India would be lower than the 6 million 800 thousand tons predicted by the India Cotton Advisory Committee (CAB).

In addition, the latest cotton ginning report released by the US Department of agriculture in March 25th showed that the US cotton production is expected to reach 3 million 549 thousand tons this year, 47 thousand tons higher than the January forecast of USDA, an increase of 26.65% over the same period, of which upland cotton production increased by 27.6%.

Today, the most active ICE5 month cotton fell 1.2%, at 63.16 cents a pound.

Domestically, although the decline in cotton planting area is a foregone conclusion, this warm wind seems to be better than none in the weak cotton market.

According to the cotton planting intention report released by relevant departments in 2015, the intention of domestic cotton planting showed a strong downward trend, and the estimated area was reduced to 56 million 210 thousand to 49 million 744 thousand mu.

At present,

Spring sowing has also been launched. According to some local cotton farmers, many township governments have been guiding cotton farmers to reduce the planting area of fine staple cotton and increase the planting area of long staple cotton or spring wheat.

It is also known that in March, the Xinjiang autonomous region issued a policy to guide cotton growers to reduce cotton planting area, increase the planting area of long staple cotton and fine cotton, and actively guide cotton growers to develop in a healthy way. In 2015/2016, the planned planting area of the autonomous region was reduced by 4 million 665 thousand mu over the previous year of 29 million 667 thousand and 910 mu, with a reduction of 15.72%.

In the new year, the intention of cotton planting has been enlarged, but the reaction of weak and even decline has been seen.

Xu Aixia, a cotton researcher at Everbright futures bank, said that with the end of the Spring Festival, Xinjiang cotton began to quicken the speed of Xinjiang. Due to the fact that Zheng merchants had no restrictions on the registered warehouse receipts, as of March 26th, Zhenggang warehouse receipt was 1077, with an effective forecast volume of 541, and the number of warehouse receipts was nearly second in the past five years, which was next to the level of 2011/2012. From the warehouse receipt composition, more than half of the warehouse receipts were Xinjiang cotton.

"Before the end of March, most cotton enterprises in Xinjiang wanted to repay the loans issued by the agricultural development bank. There was a price reduction phenomenon. The prices were uneven. The prices in Hebei and other places were stable, but the weak purchasing in the lower reaches was not positive, and the price differentiation in Henan and other places was more serious."

Xu Aixia said that in view of the current market situation, although the recent cotton planting area will be reduced and so on, the domestic cotton sale and processing are almost coming to an end. With the release of Xinjiang's pportation capacity, Xinjiang cotton has increased its output, the linseed market has increased significantly, the supply pressure has increased sharply, and the downstream demand continues to be weak, coupled with the increase in the import yarn stock of the ports, all of which are forming a pressure on the recent cotton prices.