Reinhard: Cotton City Enters A Terrible State Of Lethargy

Tuesday Market

Technology: short term

The medium term trend is bearish, and the pattern since mid November appears to be still consolidating.

The key position is 97.75 cents, then 100.90 cents.

India: Despite the high cotton harvest this year, domestic consumption is weak and exports are decreasing. This year's instability has increased.

Therefore, the ginning operators limit the start-up time, and the current start-up rate is lower than 40-50%, because cotton is slow to arrive and the sales volume is low.

Farmers do not actively deliver the goods. They hope this year's price will rise.

There are more than 1000 active ginning plants in Gujarat, but they only turn on 5-7 hours a day.

The lint percentage (GOT) is 30-32%, and it should be 35% under normal circumstances.

India Cotton Corp CCI estimated that the number of cotton arrived in December 4th was 5 million 224 thousand bales, compared with 6 million 946 thousand packages in the same period last year.

The India Cotton Advisory Committee (CAB) and the US Department of agriculture 's projections are misgivings because the actual arrival rate is slow.

It is now necessary to see if farmers are reluctant to sell seed cotton, or because cotton production is low this year, mainly due to the poor supply of Maharashtra and Andhra Pradesh.

Pakistan: cotton prices remain basically unchanged this week.

Although Pakistan cotton is one of the cheapest cotton plants, its export business is progressing slowly.

Pakistan cotton gin Association (PCGA) announced that by December 1st, the total number of cotton arrived in 9 million 650 thousand packages (170 kg), an increase of 15.47% over the same period last year.

The textile mill bought 7 million 260 thousand packages, and the exporter bought 340 thousand bales.

One obvious change is that the Pakistan rupee has depreciated against the US dollar to nearly 90 rupees against a dollar.

This will be very conducive to spinning mills and Pakistan textile exporters.

The decrease in imports has attracted much attention.

China: this week, the price of the Zhengzhou Mercantile Exchange was tested at a resistance level of 20700 yuan (12 May contract).

However, upward pressure seems to be weakening, and the market may soon return to the middle of the trading range or lower.

Trading is still very light, with daily turnover less than 100K contracts.

The unliquidated contract has been consolidated in about 250K contracts, which is the same as in February 2010.

China's demand for imported cotton is very low this week.

The import quota seems to be very limited in 2011.

CNCRC continues to bid for the purchase of cotton domestically every day. Up to now, the number of acquisitions has accumulated 1 '326' 610 tons.

CNCRC seems to have loosened some delivery terms. Therefore, the delivery of cotton to East China's coastal cotton growing areas should be much easier. So far, the cotton delivered in the eastern coastal areas of China has accounted for only 30% of the number of CNCRC acquisitions.