Does China Restrict The Import Of Australian Cotton By Textile Enterprises?

After the National Day holiday, agricultural futures varieties ushered in a general rise. After the double festival, the highest average price of spot corn exceeded 2600 yuan / ton, a new high in recent four years. As the largest grain crop in China, the price change of corn will also transmit outward. In September, the price of corn based feed rose by more than 7% over the same period of last year. In addition, the prices of starch and alcohol, downstream products of corn processing, also rose sharply. The price of corn alcohol rose by more than 22% year-on-year in September. The price of corn starch rose from 2220 yuan per ton at the beginning of this year to about 2900 yuan per ton this week, with an increase rate of more than 30%.

Next week, the global market will usher in the most critical "battle" -- the last presidential debate before the US election will be held next Friday. In addition, investors also need to pay attention to the progress of brexit, whether the OPEC + meeting will postpone next year's production increase plan, and the latest economic Brown Book of the Federal Reserve.

Does China restrict the import of Australian cotton by textile enterprises?

On October 16, Australian Broadcasting Corporation, Reuters, CNBC and other foreign media reported that China has recently stopped domestic textile mills from using Australian cotton, and the Australian cotton industry is preparing to deal with the "devastating blow" that may come.

According to the report, China implements a quota system for cotton imports. In 2020, China's total cotton import tariff quota will be 894000 tons, and about 1% of the import tariff will be paid on these cotton. But if the quota is exceeded, a 40% tariff will be imposed.

According to a source, Chinese textile mills have been warned not to use Australian products, or they will face the risk of quota reduction. If so, they may be forced to pay 40% more for Australian cotton, making the trade unsustainable.

The Australian cotton industry is very uneasy about the prospects of the Chinese market, which is the largest buyer of Australian cotton, and this huge export market usually accounts for 65% of Australia's national cotton production.

According to Agence France Presse, the value and quantity of Australian cotton exports fluctuate greatly, but in recent years, due to China's imposition of tariffs on American cotton, Australian cotton "has benefited a lot", with an annual export value of about 710 million US dollars. According to Reuters, Australia's cotton trade with China in the 2018-2019 crop year will reach US $637.4 million.

Facing the possible impact on Australian cotton in the future, the Australian cotton association issued a statement on the 16th that it was cooperating with Australian government departments to investigate the current situation and understand the development of the situation.

In response, Australian Trade Minister Birmingham said on the 16th that he was seeking more information from China and asked China to "exclude any discriminatory action against Australian cotton". Australia's agriculture minister, Mr. litpruod, also said on the same day that the Australian government had not received any official information about the changes in cotton trade with China and was preparing for a "dialogue" with China.

Tight supply, corn prices hit new highs

After the National Day holiday, the domestic agricultural product market generally rose sharply, which was boosted by the soaring international agricultural product prices. The pace of domestic new grain listing is slow, especially affected by the adverse weather in the early stage, the harvest cost in the lodging area has risen, and the temporary storage inventory has bottomed out, which jointly promotes the domestic corn and starch price to record a new high. This autumn harvest season, the price of domestic corn rose from south to north. Not only did the purchase price of deep processing enterprises in Northeast China open high, but also the price of corn in Southern Sales Area stood at 2600 yuan / ton, which exceeded the local wheat price again after five years, and the price difference between corn and wheat reached 60 yuan / ton. Although there is still a certain gap from the peak price difference between 2011 and 2012, the price of wheat to corn is still different The advantages of substitution are gradually highlighted.

Since 2017, corn prices have risen for four consecutive years. The average price of spot corn has exceeded 2600 yuan / ton, which has increased by more than 1000 yuan or 62% compared with the bottom of 2017.

As the largest grain crop in China, the price change of corn will also transmit outward. In September, the price of corn based feed rose by more than 7% over the same period of last year. In addition, the prices of starch and alcohol, downstream products of corn processing, also rose sharply. The price of corn alcohol rose by more than 22% year-on-year in September. The price of corn starch rose from 2220 yuan per ton at the beginning of this year to about 2900 yuan per ton this week, with an increase rate of more than 30%.

The rise of corn price caused a series of chain reactions, not only farmers' enthusiasm for hoarding began to rise, but also the sales of temporary storage corn were basically sold at a premium. Why is the price of corn rising so fast? What is the supply and demand situation of domestic corn?

Northeast China is the largest corn producing area in China. Since 2007, the corn planting area in Heilongjiang, Jilin and Liaoning has been increasing. At present, the maize planting area in Northeast China accounts for more than 31.6% of the national planting area. In the autumn harvest season, three provinces in Northeast China were hit by three typhoons.

Zheng Fengtian, vice president of the school of agriculture and rural development of Renmin University of China, believes that now that corn is basically mature and lodging does not affect the yield, how to rush to harvest corn after rain and not cause losses may still take a process, so on the whole, it should be the demand that causes the price rise.

According to the data of the information center of the Ministry of agriculture and rural areas and the national grain and oil information center, the corn output in 2020-2021 will reach 265 million tons, an increase of 4 million tons compared with the previous year. However, the predicted domestic consumption of corn in 2020-2021 will increase by 13 million tons to 293 million tons compared with that in 2019-2020, and the corn demand gap in 2020-2021 is expected to be 28 million tons.

Li Guoxiang, a researcher at the Institute of rural development of the Chinese Academy of Social Sciences, believes that there is no problem in meeting the demand for feed grain. In recent years, we have seen excessive use of corn for industry, mainly alcohol, fuel ethanol, and corn for starch. In 2021, the state may adopt regulatory policies to control the output of industrial corn.

South Korea honeycomb coal price rises sharply, black plate trend is weak

According to CCTV financial report, South Korean media said that currently more than 100000 households in South Korea are still using honeycomb coal for heating in winter. With the rising price of coal briquette, they have begun to worry about the winter issue this year. In 2014, there were 46 coal briquette plants in South Korea, but now they have been reduced to 36 due to operational difficulties. In addition, due to the impact of this year's new crown epidemic, many coal briquette plants are increasingly difficult to operate. South Korean media said that since the South Korean government increased the price of coal briquettes by more than three times in 2018, the lives of many poor people have become more difficult.

In the domestic futures market, the overall trend of black plate is weak this week. Wind data shows that since this week, Nanhua black index has fallen by 1.31%, and the performance of various varieties of black plate has also appeared differentiation. "We should pay attention to the structure of monthly difference in finished products. Whether screw thread or hot coil, the monthly difference between them maintains the reverse pattern most of the time. In other words, the price of finished products contains more" weak demand expectations "; as for unilateral, the price of coil is in a weak oscillation pattern. Among them, due to the worse evolution of inventory structure at this stage, the decline of hot coil is larger than that of screw thread; In addition, building materials transactions, screw ups and downs are still consistent with the trend of a shares, financial attributes are still not low. " Tao Rui, director of the black industry group of China Merchants futures, said that the performance of double coke was obviously stronger than that of Chengcai, which fully reflected the current situation of continuous de stocking of double coke, lower coke inventory than last year's level and coking coal facing "Australia coal import restriction".

However, he said that although coking coal has been fully priced based on the follow-up expectations of Haipiao Macao coal, coke did not give any further price rise expectations, and the highest price during the period was only zero basis difference, reflecting that the current market sentiment is more worried about the demand for finished products than the expectation of Shanxi's de capacity.

"Compared with the above varieties, iron ore and manganese silicon performance is relatively reasonable. Among them, iron ore, whether unilateral or monthly difference, has fully priced the port's continuous base storage in the near future; manganese and silicon fluctuated slightly around the spot price, mainly due to the changes in steel bidding and procurement volume during the week Looking forward to the later stage, Tao Rui believes that the recovery of terminal demand and the latest situation of Shanxi coking to reduce production capacity are important factors affecting the trend of black plate varieties.

"Through the above review, we can see that the main content of the current market has not yet been traded. First, the terminal demand may continue to recover or maintain stronger in October to November; second, after Shanxi Coking and Chemical Co., Ltd. has realized the capacity reduction, the gap between supply and demand of coke may further expand." To be specific, he said, whether from the seasonal rule that the top of the thread table in the fourth quarter, or the current market expectation of "cold winter caused by La Nina", or based on the previous market's inference that the subsequent decline in social finance and credit growth, and the difficulty in creating new heights in infrastructure and real estate construction, there is no support for stronger terminal demand or sustained strength, and at the same time, the current market continues to strengthen Far end interest rate with black "strong financial attributes", also is not conducive to the continued rise of prices, the overall market of black plate is more likely to resist the decline, rather than a strong rebound.

As for the expected capacity reduction of Shanxi Coking Co., Ltd., Tao Rui said that from the understanding of the situation, the probability of all follow-up landing is not large, and it is more likely that some of them will be landed. At the same time, from the middle and late November, there will be new capacity for coke production. "Therefore, we do not recommend that the high-level chase for more coke, either back to the more matching, or back to the main set intervention, at the same time, after the" Shanxi de capacity "boots landing, gradually leave the field, it is not appropriate to overestimate

Energy and chemical plate rebounded, staple fiber listed welcome big rise

This week, the trend of crude oil and liquefied petroleum gas was more than 8%. The spot price of liquefied petroleum gas (LPG) continued to rise, the tension between supply and demand in South China remained, seasonal demand increased, cold winter expectations were superimposed, and the industry chain was in high spirits, which pushed forward the strong rise of LPG futures price. The chemical products market added new recruits. The first week of short fiber listing showed a gratifying rise, with weekly increase of more than 9%. At present, the inventory of staple fiber enterprises is generally low, and the price increase of staple fiber is far greater than that of raw materials after the holiday, which makes arbitrage funds enter the market actively, and promotes the short fiber futures price to maintain a strong momentum in the chemical products market.

Weak supply and demand, eggs under pressure

This week, the egg price is under pressure, with a weekly decline of more than 4%, and the overall performance in the agricultural product market is obviously weak. Although the catering consumption during the long holiday period was strong, which led to the market replenishment after the festival, with the end of the periodical stock market, the overall loose pattern of egg supply was highlighted. Under the influence of the continuous decline of pig price and the steady recovery of pig production capacity, the support strength of substitution effect on broiler price gradually weakened, and the supporting logic of egg weakened. Driven by abundant supply and weak demand in the egg market, the price of eggs is weak.

Zhongtian futures believes that with the gradual decline of the festival effect, as well as the rise of the laying rate of laying hens and the increase of egg supply, the high fall probability of egg price is large, and it will face high callback pressure in the short term. However, in the medium and long term, the number of eliminated chickens increased, and the stock of laying hens decreased. The main 2101 contract of egg futures may have long opportunities.

It is understood that in September, the prices of chicken seedlings and eliminated chickens in the main production areas of China fell sharply. According to the data, in September, the national average daily price of eliminated chickens in the main producing areas fell from 5.10 yuan / jin to 4.51 yuan / Jin, and the monthly average price was 4.69 yuan / Jin, with a month on month decrease of 16.40% and a year-on-year decrease of 37.22%. In terms of supply, due to the limited number of culled chickens from July to August, more and more old chickens can be put on the market in September. Most breeding units plan to eliminate old chickens by the end of the month, and the supply of eliminated chickens will gradually increase. In terms of demand, the operating rate of slaughtering enterprises recovered slightly in September, but only actively purchased old chickens below 4.50 yuan / kg. In the early stage, the digestion capacity of the farmers' market was limited, and in the later stage, the demand increased slightly due to the festival effect. On the whole, due to the increase in the supply of eliminated chickens, the prices of eliminated chickens dropped slightly in September.

At the same time, the egg price rose first and then fell in September, and the profit of laying hens was relatively stable, but the egg price and profit level still failed to meet the psychological expectations of the breeding units. The breeding units were lack of confidence in the future market and held a wait-and-see attitude, and their enthusiasm for making up hurdles was far lower than that of the same period in previous years. In addition, most of the breeding chicken enterprises have almost no new orders, the demand for chicken seedlings is weak, the utilization rate of breeding eggs is declining, and some enterprises even stop hatching. As of the end of September, the arrangement of chicken seedlings in breeder enterprises was still unsatisfactory, and the utilization rate of breeding eggs was mostly 10% - 50%.

The number of culled chickens increased, while that of laying hens decreased. According to statistics, the number of laying hens in China in September was 1.274 billion, a decrease of 1.98% on a month on month basis, and a year-on-year increase of 2.78%. The newly opened laying hens in September were mainly the ones supplemented in April and may of this year. Although most of the breeding units in April were given priority to normal supplementary hurdles, the sales volume of chicken seedlings increased by 11.81% month on month. However, due to the continuous loss in May, the breeding units were generally lack of confidence in the future market, and their enthusiasm for supplementary hurdles decreased. The sales volume of chicken seedlings decreased by 17.21% month on month. The number of newly opened laying hens increased first and then decreased in September. From the perspective of chicken panning, due to the early plans of breeding units to eliminate the old chickens before the Mid Autumn Festival, and the egg price rise in September is not strong, most of the breeding units eliminate the old chickens, and the number of culled chickens is significantly increased.

In addition, Zhongtian futures analysis shows that with the gradual decrease of temperature, the laying hens have ended the resting period, and the recovery of egg production rate is improved. However, due to the poor quality of chickens and young chickens supplemented by some breeding units in the early stage, the laying rate of laying hens is still at a normal low level. In September, the number of culled hens was more than the number of newly opened laying hens, and the number of laying hens on hand decreased month on month. Therefore, it is expected that the low supplement amount after the fourth quarter is expected to support the egg price.

The trend of oil and oil is differentiated, and there is uncertainty in the upward trend of meal varieties

In terms of agricultural products, the trend of oil and oil products in the plate was differentiated. As of yesterday's daytime closing, beans rose by nearly 3%, rapeseed rose by nearly 1.4%, and palm oil fell by more than 2%.

It is understood that the USDA quarterly inventory report released on September 30 showed that, as of September 1, the inventory of American beans was 523 million catties, lower than the expected 576 million catties; the USDA monthly supply and demand report released on October 10 showed that the harvest area was reduced to 82.3 million acres, while the export forecast was raised to 2.2 billion catties, driving the final inventory down to 290 million catties, lower than the expected 369 million catties.

Zhou Fangying, an agricultural product analyst at Minmetals economic futures, said that the two reports were beneficial to the oil sector. At the same time, USDA's October supply and demand report also increased China's soybean import demand in the year of 20 / 21 to 100 million tons, and China's purchase demand further strengthened the cornerstone of the upward trend.

"The La Nina climate has raised concerns about Brazil's soybean production, boosting the market. At present, the weak La Nina phenomenon is basically established, and the international meteorological Survey (IRI) estimates that the probability of occurrence in the fourth quarter will reach 77% She explained that in general, La Nina climate has a drought impact on Brazil and Argentina, which is not conducive to soybean planting and sowing. At present, part of Brazil's production areas are dry, which has affected the sowing progress of new soybean to a certain extent. As of last week, the soybean planting progress was 3.4%, which is on the low level in recent ten years. In addition, with the acceleration of pig re feeding, the marginal improvement of domestic protein feed demand also provides support for the oil plate variety market.

"Although the supply and demand of soybean meal is relatively loose, the supply and demand of soybean meal is relatively loose, and the supply and demand of soybean meal are relatively loose, and the supply and demand of soybean meal are relatively loose In Zhou Fangying's view, the contradiction between supply and demand in the oil market is mainly in the game between reality and expectation. On the one hand, the supply of soybean meal is abundant and the inventory is high; on the other hand, under the background of strong demand, the long-term soybean supply is expected to be tight, which leads to severe differences between the long-term and short-term markets.

"In the short term, boosted by the positive factors, the oil plate probably has a strong oscillation. However, this position has fully reflected the above benefits, and whether it can continue to rise in the future is facing greater uncertainty. " Looking forward to the later stage, she said that up to now, more than 60% of American beans have been harvested, and the pressure of seasonal harvesting still exists, and Brazilian soybeans are in the early stage of sowing. At this time, it is a little early to speculate on the weather in the production areas. Considering the abundant soybean supply and high soybean meal inventory in China, there are obvious negative factors in the oil plate. It is not recommended to pursue high unilaterally, and the fluctuation risk in the later stage will be relatively large, so we can pay attention to varieties Arbitrage opportunities between and between months.