Since February, Zheng Cotton has staged a “roller coaster” market, rising sharply from 14,820 yuan/ton to 17,080 yuan/ton and then falling sharply to 15,330 yuan/ton. When it rises, it destroys everything; when it falls, the wind blows away the clouds. At this point in the market, cotton-related companies and institutions are quite divided. One view is that Zheng Cotton has at least fallen below the 15,000 yuan/ton mark, and downstream consumer terminals, market sentiment, and capital bulls have not yet put too much pressure on Zheng Cotton; another view is that Zheng Cotton has been bullish. The short and short sides will stalemate and compete around 15,500 yuan/ton to find a balance point. Then the market will rebound and return to 16,000-16,500 yuan/ton, but the intensity and amplitude will definitely be significantly weaker than after the Spring Festival.
The author believes that as the CF2105 contract fell below the 15,500 yuan/ton round mark, the negative momentum in the market and disk has been basically digested. If you continue to chase short positions and sell down, you need to be cautious and don’t “steal the chicken but lose the rice” ”, the reasons are summarized as follows:
First, China’s economy continues to be stable and resumes high growth, and the accelerated rebound in cotton consumption continues;
Second, the new crown vaccine begins to be vaccinated around the world, and global flows Economic conditions are still relatively loose, international trade and investment have begun to resume growth, and the two major economies of China and the United States have led the global economic recovery, triggering a strong rebound in global textile and clothing production and sales;
Third, the central bank’s monetary policy has become more stable , although there will be no flooding, the goal of maintaining loose liquidity and supporting real enterprises remains unchanged. Sheng Songcheng, former director of the Central Bank’s Regulation Department, recently stated: The main tasks facing our country’s current economy are to restore and stabilize economic growth and prevent systemic financial risks. It is not appropriate to tighten monetary policy until at least the first half of this year;
Fourth, since late February, although ICE and Zheng Cotton have taken turns to dive and fall, the price adjustments of cotton yarn, gray fabrics, etc. have not been large, showing strong resistance to falling, showing that terminals have relatively strong acceptance and digestion capabilities;
Fifth, the current comprehensive cost of machine-picked cotton in Xinjiang’s supervision warehouses generally reaches about 15,500 yuan/ton (gross weight). Taking into account two-month financial costs, transaction delivery, short-term shipping and other expenses, the CF2105 contract The market has formed strong support;
Sixth, affected by the rise in crude oil, energy and chemical fertilizers, mulch film, land contract fees, etc., the physical and chemical costs of cotton planting will rise significantly in 2021, and all parties are optimistic that cotton prices will be relatively high. Acceptance and tolerance are also increasing. </p