The Rate Of New Flower Reduction Is Over Expected, But The Quality Is Obviously Reduced.

From the second half of last year to July this year, the downstream textile enterprises have achieved fairly good returns.

But since July, according to our understanding, the profit margin of cotton yarn in textile enterprises has declined. More importantly, cotton yarn sales are facing great difficulties. The cotton yarn inventory of textile enterprises has risen to more than 30 days, and the repayment of enterprises has generally been postponed.

Enterprise management is facing great pressure, more and more small and medium-sized enterprises choose to stop production.

At the same time, the cost control of textile enterprises is more and more strict, so as to suppress cotton prices. Cotton procurement is also delayed as much as possible, so as to control inventory size as far as possible.

In late September, cotton started a rapid decline.

The market is worried about the poor quality of new cotton, and the pessimism of the downstream industry has a negative impact on the market.

However, the futures market has already been heavily priced in stock market. The purchasing price of large enterprises also supports the futures market, and the low purchasing power of the market is relatively strong.

The production of new flowers this year is obviously higher than expected.

The mainland's output reduction is very obvious, mainly reflected in the reduction of planting area. For example, in 2015, the planting area in Hubei decreased by more than 40%, resulting in a decrease of more than 1/3 in the same period.

Xinjiang area is affected by factors such as planting area and weather.

According to cotton prices, Xinjiang's production is estimated to be between 3 million 500 thousand tons and 3 million 800 thousand tons this year, which is 600 thousand to 900 thousand tons less than last year.

Overall, cotton production is expected to be around 5 million 200 thousand tons this year, a decrease of more than 1 million tons over the previous year.

There are several obvious changes in quality this year.

First, the overall quality declined significantly, especially in the southern Xinjiang, where the quality of cotton was poor and the market acceptance was low.

The quality of Northern Xinjiang is relatively good.

The quality of cotton increased, and the length and micron value were better.

In addition, the quality of machine picked cotton has improved significantly. Many textile enterprises have increased the proportion of machine picked cotton this year.

However, because of this year, a large number of low-grade cotton can be registered as warehouse receipts, while the market acceptance of low grade cotton is relatively low, forming a pressure on the futures market.

This year, the price difference of cotton with different quality is obviously different.

Such as Hubei real estate cotton 3128B class delivery price can reach 13100 yuan / ton, and in short supply, and the quality of cotton can be sold to 12600 yuan / ton.

The price of 3128B class cotton picking in Xinjiang area is 12200 - 12400 yuan / ton and hand picked cotton is 13000 - 13200 yuan / ton.

But Xinjiang's grade 3127 cotton is only 11500 - 11800 yuan / ton, and the price difference reaches 700 yuan / ton.

Overall,

Spreads widen this year.

At the same time, the futures price is very high this year.

At present, the price of the 1601 contract is 12200 yuan / ton, and the 1605 contract price is 11700 yuan / ton. Compared with the current spot price, the standard grade cotton discount is 900 yuan / ton, 1400 yuan / ton respectively, and the discount for the low grade cotton is 700 yuan / ton, 1300 yuan / ton respectively.

At present, the absolute price of cotton is only 13000 yuan / ton, and the discount rate is close to 10%, so the low position buying is also more positive.

A large enterprise in Shandong has released its

Purchasing quotations, including 3128 level quotation 12400 yuan / ton, 3127 level quotation 12000 yuan / ton, 1228 level offer 12300 yuan / ton, 1227 level offer 11900 yuan / ton, only 1mm length difference quoted price difference is 400 - 600 yuan / ton, and 27mm below refuses to buy.

The price is lower than the spot market's 13100 yuan / ton, but higher than the futures market's 12200 yuan / ton.

Because of the huge volume of procurement, it is equivalent to putting a price similar to the state's small batch purchase and storage of the market, which is currently relatively high spot price, but also provides support for the bottom price of the spot, thereby indirectly raising the bottom price of cotton futures.

In the short term, the quality of cotton in the late stage is improving gradually, and the purchasing price of large enterprises is also higher than that of the futures market. The larger discount makes the safety margin of buying futures higher, and the short-term price will be supported at the bottom.