How Long Can Cotton Price Go Crazy?

In the vicinity of the surrounding commodities have entered the increase in the callback or high and wide shocks.

The answer to this question first depends on external performance.

Judging from the current situation, the rise of the external market is still at an end. Once its rally is phased out, it will become the fuse to end the frenzied cotton market.

The signing of the contract has basically been completed, and the new year has not signed the sale of cotton more than 600 thousand tons. In 2011, the increase in US cotton planting area may add to the end inventory of the lowest point since 1925, and cotton production in India may not be as expected as expected, and the export volume is difficult to increase. All of these have continued to support the formation of the fundamentals of American cotton. At the same time, from the perspective of capital side, there are suspicion of funds in the US cotton 3, 5 and July contracts, while at the same time, in March, the close delivery is approaching. Under the expiration of a large number of call options, the sellers are forced to enter the market to do more, which also contributes to the rise of the market. The December contract of the new year is positive because of the positive cotton purchase signed by China and other countries in 2011/2012, and there is no reason for commercial buying. Based on the strong international fundamentals, especially in the United States cotton this year, there are still more than 5 months, the annual cotton exports

Therefore, it can be said that when the cotton price rises in the ICE period is over, cotton is in decline.

Secondly, we must pay close attention to the trend of China from the fundamental factors behind it.

In late January 2011, domestic cotton broke through the 30 thousand yuan mark, and once again entered the following market trend, until now, approaching the 35 thousand yuan mark, but the spot has always maintained a steady or slightly upward trend. The recent market price of the spot market has not been matched by the volume. The upside down trend is still serious. In addition, from the actual supply situation, the excessive concentration of the intermediate link cotton storage phenomenon, the import cotton since the beginning of December last year, and so on, all seem to be playing a role in the market. This also allows us to gradually reduce the tension in the supply situation of the latter part of the year.

At present, the international market has already overestimated the demand for textile cotton in China and other countries. Once the latter supply is not expected to be tight, at the same time, in view of the fact that the stock market tends to break up in the past, sensitive funds will be ready to make profits at any time, thus ending the crazy pattern of the cotton industry.

It is worth noting that, on the 17 day, there are signs of adjustment in various technical indicators of domestic commodity futures, and with the analysis of the fundamentals falling into a more favorable vacuum period, the possibility of entering into a round of intermediate adjustment since then has not been ruled out.