In early trading on Tuesday, cotton yarn and cotton prices rose violently! The main contract of cotton yarn is approaching the daily limit, with an increase of more than 5%, and the price has reached a new high in more than 3 years, while cotton has increased by more than 2%, with the price reaching a maximum of 17,495 yuan/ton, also a new high in the past 3 years!
Judging from the trend in early trading, in less than half an hour, the transaction amount of the main cotton yarn contract exceeded 1 billion, while the transaction amount of cotton was nearly 10 billion. The transaction activity is evident!
Domestic cotton prices continue to rise
Cotton prices at home and abroad continued to rise after a brief decline last week. Domestic cotton prices have increased more than those abroad, and the price gap between domestic and foreign cotton has widened.
Last week, the weekly average price of the China Cotton Price Index (CC Index 3128B) was 17,126 yuan/ton, an increase of 286 yuan from the previous month; the weekly average price of the Cotlook A index was 98.15 cents/pound. , up 0.51 cents month-on-month, with a discount of RMB 15,464 per ton under the 1% tariff, which is RMB 1,662 lower than the China Cotton Price Index (CC Index 3128B), and the price difference expanded by RMB 207 from the previous week; the weekly average price of the main contract CF109 in Zhengzhou Futures is RMB 16,812 / ton, a month-on-month increase of 138 yuan; the recent average weekly contract price of ICE cotton futures was 89.13 cents/pound, a month-on-month decrease of 0.54 cents.
The total national cotton output fell by 3.41%
At the end of June 2021, the China Cotton Association conducted a According to the survey on cotton planting situation, the national cotton planting area is 43.4559 million acres, a year-on-year decrease of 5.47%. The yield per unit area is expected to increase slightly year-on-year, and the total output is approximately 5.7218 million tons, a year-on-year decrease of 3.41%. The national cotton budding rate was 97.25%, 0.28 percentage points lower than the same period last year. Among them, the cotton area in Xinjiang is 36.8333 million acres, a year-on-year increase of 0.49%; the predicted yield per unit area is reduced by 2.26% year-on-year; the total output is expected to be 5.185 million tons, a year-on-year decrease of 1.12%, accounting for 90.9% of the national share. The growth of cotton in Xinjiang is relatively lagging this year, and the growth of cotton seedlings is worse than last year.
Generally speaking, driven by favorable fundamentals such as the overall decline in national cotton production and rising spot prices, the short-term trend of cotton is mainly strong.
As for the market outlook, most institutions are generally bullish.
Nanhua Futures (603093) believes that yesterday’s international cotton price index (SM) was 102.63 cents/pound, an increase of 1.21 cents/pound, which is equivalent to a general trade port delivery price of 16,161 yuan/pound. tons; the international cotton price index (M) is 101.46 cents/pound, up 1.20 cents/pound, which is equivalent to the general trade port delivery price of 15,979 yuan/ton. The average price of reserve cotton yesterday was 17,008 yuan/ton, an increase of 109 yuan/ton from the previous day. The Xiaoshao area has recently been affected by typhoons with heavy wind and rain, which may have a greater impact on spinning mills. The price of cotton yarn is stronger than that of cotton. The short-term price may still have a surge. It is recommended that after the price surges, long orders should be reduced on rallies, and then retake the position after a pullback. Return long orders.
Meierya (600107) futures pointed out that on the international front, USDA predicted in July that the opening stocks of global cotton in the new year will decrease, production and consumption will increase, and the ending stocks will decrease. Lido cotton prices. The planting area of U.S. cotton has decreased and the growth progress has lagged behind, but the rate of high-quality cotton is better than in previous years. On July 26, ICE cotton futures fluctuated and closed with a doji. Domestically, the economic recovery continues, and cotton prices are bullish in the long term. However, affected by macro-control of commodities and external disturbances, long and short prices are intertwined. In terms of supply and demand, the cotton planting area across the country has declined, and the growth situation is generally worse than last year. The transaction volume of reserve cotton was good, and the enthusiasm for auction and storage in the market was high. In terms of spot prices, transactions were light due to price increases. The downstream cotton yarn market has a high start-up and low inventory, and new orders have improved. In addition, the disaster in Henan has triggered a short-term “national trend” in the cotton textile industry, which has slightly boosted textile sales. On July 26, Zheng Cotton’s main force made a slight correction. Cotton prices are supported by good transactions in reserve cotton and high spot prices, and the market is worried about the rush to harvest new cotton. It is expected that cotton prices will fluctuate strongly in the short term. In terms of strategy, continue to hold long orders.
Guodu Futures believes that Sino-US negotiations have reached a deadlock, and cotton fell in response, but it rose slightly in late trading and recovered its losses in the night. Recently, widespread rainfall has continued across the country, cotton production is expected to decline, and the heavy rain has caused traffic congestion, triggering a periodic supply and demand contradiction in some areas. The heavy rain once again stimulated domestic patriotic sentiments, and the craze for domestic products accelerated terminal destocking. Judging from my country’s textile and clothing sales data in June, domestic demand and exports exceeded expectations, and domestic and foreign demand is expected to remain positive. At present, the market feedback is that the current order situation is acceptable, and the reserve cotton auction bottom price has been rising in recent weeks, and market demand has certain support for the current price. However, cotton prices have shown a large part of the profit. In the future, we still need to pay attention to market orders and possible policy risks. It is recommended to reduce long positions on rallies, be cautious in chasing increases, and mainly build long positions on dips. </p
