Last week (September 7-11), during the adjustment of cotton prices, crude oil and stock markets plummeted, and coupled with the news that the United States banned Xinjiang cotton, Zheng Cotton panicked and fell nearly 700 points during the session, hitting a record high of more than two months. New low. The continued rise in imported yarn prices has formed an internal and external inversion, supporting domestic yarn prices and promoting the sales of domestic yarns, showing a stable and rising trend in sales recovery and prices. In August, the year-on-year value of textile and apparel exports showed positive growth for the first time this year. After the sharp drop in cotton prices, yarn prices have been relatively stable, and profits from spinning production have improved, which is conducive to further recovery of production capacity and increased cotton consumption. Cotton substitutes, polyester 5438 yuan/ton, fell 67 yuan/ton with oil, viscose 8850 yuan/ton, a weekly increase of 200 yuan/ton. The cotton CNCottonB index is 12,591 yuan/ton, a weekly decrease of 71 yuan/ton. Compared with Zheng Cotton CF2009, the price premium is 561 yuan/ton, an increase of 179 yuan/ton.
Futures. After continuous rises, Zheng Mian technically needs to adjust. The main contract CF2101 closed at 12,590 yuan/ton last Friday (September 11), down 280 yuan/ton for the week, with an increase of 46,992 lots of transactions, an increase of 3.6%, and a decrease of 25,355 lots of positions, or a decrease of 6.8%; the top 20 positions, There were 265,155 long positions, an increase of 6,699 hands; 350,612 short positions, a weekly decrease of 22,457 hands; and a net short position of 85,457 hands, a weekly decrease of 29,156 hands. The market fell sharply. On the one hand, hedging positions were closed at spot prices, and on the other hand, speculative short orders were closed with profits, resulting in a significant reduction in net short positions. In this round of decline, Zheng cotton’s decline was greater than that of the external market, which has formed a situation where the price of floral yarn is inverted internally and externally. Although new cotton is about to be launched and supply pressure is increasing, trading companies made huge profits through point-price sales during the seed cotton acquisition period last year. It is expected that competition for resources will become more intense this year, pushing up cotton prices.
External market: Affected by the decline in external oil prices and stock markets last Tuesday, it was quickly repaired under the favorable stimulation of good exports and production reductions. ICE’s main December contract closed at 64.82 cents/pound, weekly Down 29 points.
Spot aspect. Zheng cotton fell sharply last Tuesday, triggering a large number of price point transactions. The price of Xinjiang cotton in the mainland’s basement is concentrated at 12,000-11,800 yuan/ton for the CF2009 contract, the basis difference for machine-picked cotton is concentrated at 400-600 yuan/ton, and the basis for hand-picked cotton is concentrated at 800-1,000 yuan/ton. Among the imported cottons, Brazilian cotton has a better price-performance ratio than Xinjiang cotton of the same quality, and the transactions are active. Indian cotton has increased transactions due to its low price. The price of US cotton is significantly lower than Australian cotton, which is close to Xinjiang cotton and does not have three-strand yarn. It is popular, and transactions have increased. Spinners still adopt the purchasing strategy of buying as they are used and bargaining at low prices.
Operation suggestions. In this round of decline, China’s domestic cotton prices have fallen more than those abroad, and domestic and foreign yarn prices have also shown an inversion. Domestic cotton yarn sales have picked up, prices have stabilized, and profits have improved. Textile and apparel exports increased by 3.2% in August, reflecting the continued recovery of exports and the continued recovery of cotton consumption. The current cotton price is at a relatively low level, and it is expected that Zheng cotton prices may recover in the short term. </p
