Recently, the main contract of Zheng Cotton has oscillated back after hitting a high of 15,610 yuan/ton, and tested the important support of 15,000 yuan/ton twice in a row. It is obvious that the bulls lack confidence and the wait-and-see mood has increased. Supported by the continued positive performance of ICE in the external market and sufficient cotton spinning orders, the short sellers did not have enough confidence to increase the pressure, and the long and short sides repeatedly competed around the 15,000 yuan/ton mark.
The author believes that there are three main reasons for the failure of Zheng cotton’s rebound this week: First, the United States has imposed a regional ban on all cotton and tomato products from China’s western Xinjiang region; second, the central bank’s announcement this week (January 11- 15th) A total of 16 billion yuan of reverse repurchase operations were carried out in a low-volume and high-frequency manner for several consecutive days. This week, 55 billion yuan of reverse repurchase expired, with a net withdrawal of 39 billion yuan of reverse repurchase in a single week, and market liquidity weakened; third, the total domestic cotton production in 2020/21 will be higher than expected, and the supply and demand situation needs to be rebalanced . According to statistics, as of January 14, the total cumulative lint processing volume in Xinjiang was 5.2648 million tons (the autonomous region’s lint processing volume was 3.2438 million tons, and the Corps’ lint processing volume was 2.021 million tons), a large year-on-year increase.
The author judges that Zheng Cotton’s retest of the 14,700-15,500 yuan/ton range does not change the mid- to long-term reversal trend of Zheng Cotton. Therefore, it is necessary to be cautious when chasing shorts and selling below 15,000 yuan/ton. The current “sell high, buy low” operation in the box Or wiser. First, China’s economic inflation expectations are relatively strong. Preliminary statistics show that the cumulative increase in social financing in 2020 was 34.86 trillion yuan, 9.19 trillion yuan more than the previous year. Industry analysis shows that the current downstream price level of the economy is at the bottom of the inflation trend, and will return to positive levels in March or the second quarter of 2021 and continue a moderate upward trend; secondly, the sharp rise in the prices of corn, soybeans and other agricultural products has stimulated the grain and cotton price parity effect Adjustments will make the competition for land between grain and cotton more prominent in 2021. Since 2020, domestic corn prices have continued to rise, and the cumulative increase has reached a record high. At the same time, it has stimulated a coordinated rise in wheat and rice prices, and farmers’ confidence in growing grain has recovered; thirdly, global cotton consumption will enter the “fast lane” in 2021, and production and sales will accelerate to recover. . As the COVID-19 vaccine is widely vaccinated around the world, global textile and clothing consumption is expected to usher in a retaliatory rebound; fourth, the low number of warehouse receipts for Zheng Cotton provides the basic conditions for capital speculation and increases. </p
