The cotton 2101 contract has been adjusted back for three consecutive days, and the news of 500,000 tons of purchasing and storage has no immediate benefit for Zheng Cotton. The purchasing and storage news is as follows:
On October 21, the State Administration of Grain and Material Reserves and the Ministry of Finance of the People’s Republic of China jointly issued an announcement (No. 2, 2020): December 1, 2020 From March 31 to March 31, 2021, about 500,000 tons of Xinjiang serrated fine velvet cotton, which was produced and processed in 2020/21 and has been included in the professional supervision of Xinjiang cotton, has been put up for bidding every day. About 7,000 tons.
Judging from the content of the announcement, the difference from 2019/20 is reflected in the following two points: First, the announcement time is earlier than the previous year, which is reserved for the depository enterprises. Provide sufficient processing, batching, and transportation time; secondly, the proportion of micronaire grade B and above shall not be less than 80%, and the storage requirement in 2019/20 requires that the proportion of grade B and above shall not be less than 90%. Considering that the horse value of machine-picked cotton in Xinjiang is relatively high this year, the standards have been lowered.
The industry believes that the arrival of 500,000 tons of Xinjiang cotton is not a policy “emergency”, and cotton-related companies and investors do not need to make a fuss. Announcement No. 1 clearly states that “opportunities will be arranged to rotate in, and specific arrangements will be announced as soon as possible”; on the other hand, the quantity of cotton reserves rotating out in 2020 will be greater than the amount entering, and the cotton grade and quality indicators are low. In order to meet the needs of textile enterprises, it is necessary to continue Optimize reserve structure and improve reserve quality. Therefore, the announcement is only made more than 20 days earlier than in 2019/20. The amount of rounds, the calculation method of the maximum price of the round bidding, and the quality requirements are all expected.
Whether the import of 500,000 tons of Xinjiang cotton can start depends on the price difference between domestic and foreign cotton. There are still many variables in the market before December 1. According to the announcement, “Trading will be started when the price difference between domestic and foreign cotton falls within 800 yuan/ton; trading will be suspended when the price difference between domestic and foreign cotton exceeds 800 yuan/ton for three consecutive working days during the rotation period.” However, the current price difference between domestic and foreign cotton is as high as 2000-2200 yuan. Yuan/ton, obviously does not meet the conditions for reserve cotton rotation. Therefore, there are three paths to start the rotation: first, the price of foreign cotton rises; second, the spot price of domestic cotton falls; third, the domestic and foreign cotton prices move in the opposite direction, but the price difference between domestic and foreign cotton narrows significantly. If ICE continues to strengthen on the back of 70 cents/pound and tries 73 cents/pound or 75 cents/pound, Zheng cotton can only start the rotation of cotton reserves to fall sharply or rise slightly to narrow the price difference between domestic and foreign prices.
From the above analysis, it can be seen that the purchase and storage is expected, and the actual purchase and storage has not yet been determined.
Zheng Mian closed overcast on the 22nd, and the daily line did not turn warmer. However, the market fluctuated within a narrow range during the day, and there is no intention to explore further for the time being. 14400 has short-term support. If the afternoon market continues in the night market, it can be appropriately Enter long orders in the short term. Watch for pressure conditions near 14615.
As for the daily rise, given that the early rise was too fast and too violent, it is not a bad idea for the market to fall below 14350 and further dip and repeat. Only with at least one or two positive lines can we judge the recovery of the rise. </p
