After just two days of weekends, the bulk commodity market has undergone tremendous changes, and the trends of various varieties have also been seriously differentiated. The performance can be described as sky-high and underground. Among them, commodities dominated by precious metals and black series continue to soar across the board. Some energy and chemical products such as crude oil have plummeted due to the impact of the new crown epidemic in the UK.
According to relevant reports, on December 20, the number of new confirmed cases in a single day in at least 30 countries around the world exceeded 1,000. The United States even recorded an astonishing daily increase of more than 400,000 cases on the 18th; the United Kingdom due to its A new mutated strain of the new coronavirus that is more contagious has been discovered and is facing an out-of-control situation. On the same day, France, Italy, the Netherlands, Belgium and other countries urgently announced response measures. Under the guidance of market pessimism, crude oil prices fell sharply, driving some energy and chemical products such as fuel oil, asphalt, and staple fibers to decline sharply.
Despite the pessimistic market sentiment, cotton has been relatively stable in this round of performance and continues to maintain a slight upward trend. Although it has not been affected by the bull market atmosphere for the time being, as long as the new crown epidemic is slightly alleviated, there may be a need to make up for the increase. From a fundamental point of view, there has not yet been a major conflict between cotton supply and demand, so the stable price fluctuations are in line with expectations. According to the forecast of the National Cotton Market Monitoring System, my country’s cotton production and demand gap in 2020/21 is 1.8258 million tons, an increase of 192,100 tons from the previous year, and the inventory-to-consumption ratio is 79%, a decrease of 4 percentage points from the previous year. In the long term, although the gap between supply and demand has expanded, the supply is still sufficient in the short term.
According to the historical K-line of Zheng Mian, every major crisis is always followed by a bull market in the commodity market. This is an inevitable sequelae after mankind saves itself. If this round of bull market is not really coming, the room for correction of cotton prices will be limited because demand is expected to gradually recover in the future. As long as there is no “black swan” event in the market that affects cotton supply and demand, cotton prices do not have the conditions to fall sharply. Under the current trend of strong bullish atmosphere in the market, Zheng cotton may continue to rise. </p
