Policy fabrics restrict the rebound of cotton prices

Last week, Zheng cotton fluctuate within a narrow range of 19,800 yuan/ton, which is a dilemma. The new year's storage rules are the main reason why the current market fluctuates.

Beginning in September, the new cotton standard was formally implemented. In the 2012/13 collection rules, premiums and discounts are based on levels and lengths of 3% and 1%. In the 2013/14 new cotton standard, the grade was removed and the color grade was included in the inspection standard. The standard grade changed from the original 328B grade to 3128B. In addition, there are major changes in the level of color, length uniformity, the quality of the press, and the micronaire value of water. In the new inspection standard, the "rewards" for premium cotton and inferior water premiums for premium water and the "penalty" for premiums are clearly enlarged.

At the China Storage Cotton Safety Conference held at the end of July, many companies participated in the discussion of the new year's storage and storage, which has basically been adjusted. The 2013/14 annual collection and storage will be more stringent, which is mainly reflected in the high discount rate and cancellation of plants. Inspections and secondary settlements. It is reported that the controversial level 22 in the color level of collection and storage is also included in the scope of the collection, but it is difficult to design for premiums and discounts. September is about to start purchasing and storage, and it is estimated that the details will be introduced in recent days. The market believes that the low-grade lint 22's discount premium is lower than the saw tooth quality difference in the “Cotton Sale and Purchase Agreement and General Terms” issued by the Association and the 22-grade lint discount of 700 yuan/ton in the ** delivery varieties. According to the estimation of the price difference between the reserve price and the reserve price of 1,300 yuan/ton, according to the purchase and storage price of 20,400 yuan/ton, the price of ** is reduced to 19,100 yuan/ton, and the premium of 22 yuan in the ** delivery is 700 yuan/ton. Then ** warehouse receipt price is 19,800 yuan / ton. Cancel the factory inspection and the second settlement, the former strengthened the poor quality of cotton and fish, and the latter increased the company's capital costs. If the above three assumptions are fully established, then the "high quality" cotton will enter the State Reserve, and the "bad" cotton will enter the warehouse receipts, thus putting pressure on the futures price and making it relatively bearish.

In summary, the national reserve standards under the new cotton inspection system have strengthened the difficulty of deposits. Take the 2012/13 seed cotton purchase price as an example, the Mainland Cotton Grade 4 (the cotton grade at the point of delivery under the old cotton standard) seed cotton acquisition Price 4 yuan / kg, lint average quoted at 18,500 yuan / ton to count, warehouse receipts cost price at 19,360 yuan / ton. Therefore, the purchase and storage policy restricts the rebound of futures prices.