Since early November, the long and short sides of the Zheng Cotton CF2101 contract have been competing repeatedly within the 14,000-14,500 yuan/ton compartment. Judging from changes in trading volume and positions, the market direction is still unclear, and there is no large amount of speculative funds or Hedging orders entered, and the wait-and-see sentiment still prevailed.
On the one hand, 14,000-14,500 yuan/ton is the actual inventory cost of machine-picked cotton in Xinjiang ( Including short-term dumping, warehouse “lump fee” and about 2 months of financial costs), if it falls below 14,000 yuan/ton, the production and sales of most cotton processing companies will be “upside down”; on the contrary, if it rises above 14,500 yuan/ton, cotton textile mills, middlemen The confidence to receive goods is insufficient; on the other hand, judging from the public inspection results, the grade and quality of early flowers in Northern Xinjiang in 2020/21 are poor (the indicators of mid-term flowers in Kuitun, Shihezi, Changji and other places have improved significantly), leading traders to predict The enthusiasm for purchasing is not high, and the supply pressure has increased significantly, thus restricting the rebound height of Zheng cotton.
So how will the Zhengmian disk operate in November and December? The author’s opinion is that the short-term Zheng cotton market will still consolidate at 14,000-14,500 yuan/ton (the bottom of 14,000 yuan/ton has been basically confirmed), and the mid- and long-term may rise to 16,000 yuan/ton. Therefore, when funds are sufficient and interest rates are low, The futures price is flat or even upside down. With the first phase of the Sino-US trade agreement advancing in an orderly manner, Xinjiang cotton processing enterprises must reasonably grasp the progress of lint sales and capital withdrawal. There are several reasons:
First, the first thing after the U.S. election will be to reach a compromise on the financial rescue plan, which will stimulate an overall rise in the U.S. stock market, commodity futures, etc.; second, in 2020 / In 2021, the quality and grade of machine-picked cotton in Beijiang are very unsatisfactory, and the production and sales of lint cotton are flat or even “upside down”. As of mid-November, the warehouse receipts and effective forecast quantities of Zheng cotton are less than 50% of the same period in 2019/20, and the actual pressure is very light. It is in a state where it is easy to rise but hard to fall; third, the domestic epidemic situation is stable, and the “Golden Nine and Silver Ten” characteristics of domestic demand markets such as cotton textiles and clothing are relatively obvious, with a steady stream of orders in the spring and summer of 2021; fourth, domestic corn, wheat, rice and other food prices are still rising Momentum, the grain and cotton price ratio has tilted, and there is a need for cotton prices to make up for the increase and balance in the medium and long term. </p
