Cotton City Outlook: Cotton Prices Will Be Difficult To Break Up For Some Time In The Future

The domestic cotton market's inventory clearance rate is obviously faster than that of the global cotton production.

From the balance of supply and demand, the domestic cotton market will gradually shift from oversupply to balance or even tighter supply.

There is a strict quota management system for cotton imports in China. In the long run of the gap between production and demand, the relationship between supply and demand will form a market trend with global market segmentation and regional characteristics.

Current domestic

As the operation is getting better, the output of cotton yarn and other products will increase, and the gap between production and demand will increase.

The growth rate of global cotton market is not fast enough, but the growth rate of production is faster than that of domestic expansion. Therefore, there may be a divergence between domestic and foreign cotton markets.

Commodities began to rebound at the end of 2015, and the rally was basically higher than any previous bull market.

Since the beginning of this year, the price of industrial products has dropped by 13%. Although we feel that we have dropped a lot, the actual price is actually in the latter half of last year's fourth quarter. It just dropped about 1/3 of last year's increase.

The performance of agricultural products has weakened even earlier this year, especially the price of oils and fats.

In his view, the current trend of commodity prices can be defined as a bear market rally, but this rally seems to be coming to an end.

"There is a significant difference in the performance of agricultural products and industrial products."

It is said that the correlation between the prices of agricultural products and industrial products is not very strong. Before 2008, sometimes you will see that the trend of agricultural product prices is opposite to that of industrial products, for example, from 2004 to 2006, when the price of industrial products increased, agricultural products fell.

After 2008, we can see that the price of industrial products and the trend of agricultural products are highly consistent, and the macro attributes of agricultural products are indeed increasing.

"Theoretically, there should be little relationship between the demand supply of agricultural products and the supply and demand of industrial products, and from the perspective of price trend, it can be found that the correlation is greatly improved."

Feng Mengxiao believes that in 2016

The core power of the big market is structural reform of supply side.

As for the cotton market, as the scale of the national cotton store goes out, the inventory consumption ratio of China and the world will continue to decline, providing support for cotton prices. "But the deadline is at the end of 2016/2017, when the 2017/2018 year ushering in a productive year, the market situation will be different."

"In view of the change in the financial environment from loose to neutral, the focus of this year's market will be reflected in deleveraging."

Feng Mengxiao said, "in the context of the shortage of industrial chain terminal and the superposition of capital factors, the capital turnover of enterprises in the industrial chain will face a periodic test. The so-called periodic test is a good time off, and it is possible to form a so-called pulsatile effect."

Reporters integrated some market investment institutions on the cotton market price rise and fall expectations found that the current market generally believe that the supply of cotton market situation is better, but demand has not given a stronger signal, if we take into account the national cotton auction sales ready, new season global and domestic cotton planting area is expected to increase, the number of cotton warehouse is high, and so on, the short term cotton prices to new high probability is very small, in the next period of time, domestic spot cotton prices will show an oscillating trend.

For more information, please pay attention to the world clothing shoes and hats net report.