CNCotton: During the week ending November 10, domestic seed cotton price continued to go up; lint cotton price remained weak; both ZCE futures and CNCE showed wide-range fluctuation; cotton yarn price was stable; and polyester staple price went up constantly.
1. New crop picking is almost completed.
According to the sample survey of National Market Monitoring System (NCMMS) among 1,029 cotton growers in 11 provinces as of November 8, picked seed cotton has reached 3,348 tons, accounting for 96.35% of their estimated production, up 3.94% from last year, with 2,117 tons of seed cotton have been sold to ginners, accounting for 63.21% of their total picked seed cotton, down 18.98% from last year.
Another survey of NCMMS among 91 large and medium-sized ginners, the new crop ginning progress has reached 59.31%, up 12.98% from the previous week, with an average sales progress of 22%, down 0.13% from last year.
Based on an estimated production of 6.47 million tons, 3.94 million tons lint cotton has been procured as of as of November 8, down 6.41% from last year. Ginned cotton reached 2.34 million tons, up 20% from last year, with 870,000 tons lint cotton have been sold, down 6.45% from last year.
2. Seed cotton price continued to go up; both ZCE futures and CNCE showed wide-range fluctuation.
With the fast allocation of ADBC loans, more ginners and merchants participated in the cotton hording. As a result, seed cotton price was boosted. However, the lint cotton price remained weak. On November 9, average price of T328 was 12,638 yuan per ton (including freight), down 87 yuan or 0.68% from the previous week; ZCE January contract reached 13,450 yuan per ton, up 100 yuan or 0.21% from the previous week; CNCE January contract reached 13,320 yuan per ton, up 15 yuan or 0.11% from the previous week.
3. Both cotton yarn and polyester staple prices went down.
32S carded cotton yarn was offered at 18,815 yuan per ton, unchanged from the previous week. Polyester staple price was offered at 11,500 yuan per ton, up 100 yuan or 0.88% from the previous week.
4. Outlook
On November 9, the USDA supply and demand estimates lowered the stocks, production and imports of the world, which offers a gleam of hope for the bearish market. Meanwhile, the seed cotton price went up gradually with the increased purchasing volume of ginners. More and more ginners and merchants started cotton hording. Insiders have different attitudes towards this phenomenon. Some believe that cotton hording might trigger the turning point of the price; others thought that cotton hording faced great risk. Anyway, the fact is that some growers became reluctant to sell their seed cotton, which helped creating a background for the rise of lint cotton price.
Psychology is crucial to the market. After a year-long slack market, should the government to make additional policy to lower the domestic cotton price? As winter is drawing near, cotton yarn exports have been accelerated. According to the November survey of NCMMS, 96% textile mills have the intention to purchase cotton in near term. It indicates that domestic mills also believe the cotton price will go higher in the future. That is to say, price hike may happen as soon as domestic mills purchase cotton in large volume.
