At present, the transaction prices of Zheng cotton, spot cotton, and reserve cotton have formed a “resonance” rising situation. Some cotton processing companies and traders have even shown reluctance to sell or not quote prices. The bullish sentiment of cotton companies to chase the increase has been suppressed. Keep inspiring and motivating.
As for the reasons for this round of Zheng cotton’s rebound, the industry’s opinions can be summarized as follows: First, the reserve cotton round has a “circuit breaker” minimum price of 11,500 yuan/ton, which is higher than the disk price of the recent month contract CF2007 , the “inversion” of futures is prominent; second, the central bank’s “asymmetric” interest rate cut, monetary policy continues to be loose, triggering a collective rise in the stock market and commodity futures market; third, since June, the northern Xinjiang cotton area has continued to have high temperatures and little rain, and the drought has worsened (Part of the Xinjiang Corps The city suffered the worst drought in ten years), which provided conditions for speculation funds to enter the market to increase prices; fourth, the economic data released in June showed that there is no risk of inflation or deflation in our country’s economy. There is still room for acceleration and recovery in the resumption of work and production in the cotton textile and garment industries; fifth, the COVID-19 epidemic has been fully controlled, with zero growth in Beijing for several consecutive days. Professor Zhang Wenhong judged that “the epidemic in China is over.”
So can the main force of Zheng Cotton hold on to 12,000 yuan/ton in the short term and attack the point above 12,500 yuan/ton? The author believes that unlike the “bull market” of A-shares, although the capital market has a keen sense of smell and has the upper hand in the short-term game with the industry, as the “wind direction” of the stock market, commodity futures, and asset management regulation changes, the power of speculation may weaken. Therefore, it is not easy for Zheng Cotton’s main force to hold on to 12,000 yuan/ton. The reasons are as follows:
Firstly, as the transaction price of cotton reserves continues to rise, it is the same as or even “inverted” with the futures near-month contract and the spot price of cotton in Xinjiang’s warehouses. It is difficult for cotton textile enterprises to withstand and digest the price. The capacity has declined, and the enthusiasm for participating in bidding and purchasing goods has gradually weakened in mid-to-late July, and the daily transaction rate may gradually decline; secondly, July to August is the off-season for the cotton textile and clothing industries, and there is a “lack of orders”, and terminal demand The support for cotton prices is very limited; thirdly, as farmers in Xinjiang actively respond to drought and disaster relief and some major cotton-producing areas receive rainfall, the opportunities for capital speculation are reduced; fourthly, as of July 8, there are 20,365 Zheng cotton warehouse receipts , there are 1,895 valid forecasts, which total about 946,000 tons of cotton. How to deal with such a large number of warehouse receipts when the new cotton is only about two and a half months away from the market? Fifth, as the U.S. election approaches, trade and political relations between China and the United States, China and India, and China and Europe are all facing certain uncertainties, and factors that will support cotton prices in the future are limited. </p
