Lido factors highlight the advantages of Zheng cotton price increases do not change

Since October, with the improvement of economic data and the news of cotton, cotton futures continued their uptrend. In the short span of 9 trading days, cotton futures rose 6.07% in total. The G20 finance ministers' meeting held last month identified the issue that major economies will not withdraw from the stimulus package. This has eased the outflow of capital from the capital markets. Coupled with the continued improvement in the economic situation in major countries, the market is getting more emotional. The major agencies generally agree that the world economy has entered a stage of "slow recovery." Cotton production in the global cotton usher in a bull market to lay a solid foundation. ICE cotton prices continue to take advantage of strong. As of October 21, ICE main cotton settled at 67.96 cents / lb in December, up 10.06% from the beginning of October, and the price has basically recovered to the pre-crisis level. CFTC latest position data show that as of October 13, hedging and index fund net long positions continued to increase, including hedging net long positions increased to 39,828 sheets, the index fund long positions increased to 79,566 sheets. The increase in net long positions shows the long-term bullish trend in the US cotton market. Global and domestic cotton production has no suspense. As the world economic situation improves, the cotton demand increase or will exceed expectations, which laid the foundation for the cotton price rise. The purchasing price of seed cotton since the middle of September has been continuously raised. The purchase price of seed cotton in some areas is close to 6.6 yuan / kg. The purchase price of converted lint has reached 14,000 yuan, close to the level in 2003/04. With the recovery of orders from major cotton textile enterprises and the increase in demand for cotton in 2010, there is not much remaining cotton stock in the State Reserve and the limited control capacity. Therefore, I think the cotton price will continue to be strong and the spot cotton price will return to the high of 2003/04 Further increase. According to the latest statistics from the General Administration of Customs, in September 2009, China's textile and apparel exports amounted to about 16.752 billion U.S. dollars, an increase of 6.72% MoM and a decrease of 6.98% MoM. Exports of clothing and accessories 11,081,000,000 US dollars, an increase of 5.20%, down 8.12%. January-September 2009 China's textile and garment exports amounted to 121.65 billion US dollars, down 11.2%. Textile exports decline further narrowed, coupled with a slight increase in the textile industry PMI index, the overall operation of the textile industry better than market expectations. From the data provided by WIND, we can see that the main business income of the textile industry has obviously improved. Apart from the apparel manufacturing industry, the gross profit margin of the sales of the textile and chemical fiber manufacturing industries has risen from the beginning of the year. The profitability of various types of enterprises Increase. The improvement in the downstream manufacturing business and the increase in the number of orders will stimulate cotton prices. Lillian multi-period cotton prices focus on factors that will boost cotton prices. However, bulls have accumulated a lot of profit-making chips, so short-term Zheng Cotton or will be adjusted, but due to the solid fundamentals support, the adjustment will not be significant. Therefore, I predict, Zheng cotton futures will continue to be on the red after a brief adjustment.