On the morning of the 29th, Zheng cotton continued to consolidate at a low level. Although the decline was not large compared with other varieties, the increase was also weak. After all, there was no upward reason to convince the market. However, the rise and fall of the market always surprise everyone. In the afternoon, Zheng Cotton saw a rapid rise, which made people seem to see a little shadow of the slow bull. However, the author believes that Zheng Cotton still maintains a volatile trend in the short term.
Judging from the trend of Sino-US international relations, the recent “interactions” between the two countries have worried the market. As the world’s two largest economies, if there are major problems in Sino-US relations, it will also have a negative impact on each other’s economic and trade fields. have a very important impact. According to relevant data, the United States has fallen from its position as China’s largest trading partner, and China’s foreign trade, including the textile and clothing export market, will be affected.
The global epidemic has not yet been effectively controlled. Although vaccine development and testing continue to advance, the epidemic situation facing the world is still very severe, and the number of infections continues to reach new highs. Under the requirements of epidemic prevention policies, human production and business activities have been severely restricted, which has a great impact on social and economic development, and in turn affects commodity prices. Domestic commodity prices are now at the bottom. Although prices have rebounded recently, as new coronavirus cases have been discovered in some areas, the domestic market has been dragged down again, and prices have seen a wave of corrections, including cotton.
From the supply side, domestic local cotton production has been affected by floods this year, and output has declined. However, for Xinjiang production areas, output has remained relatively stable. According to data from the National Cotton Market Monitoring System, the actual sown area in the northwest inland cotton area is 35.639 million acres, a decrease of 42,000 acres or 0.1% year-on-year. Among them, the actual sown area in Xinjiang is 35.326 million acres, which is basically the same as last year. The total output in Xinjiang is expected to be 35.326 million acres. 5.066 million tons, a year-on-year increase of 1.8%. Foreign cotton production is expected to increase or decrease and remain basically stable. Therefore, there is basically no problem on the cotton supply side this year, unless there are extreme weather events in August and September.
The biggest concern is the recovery of the consumer market, which is the main contradiction affecting cotton prices. At present, the domestic market remains stable, while foreign markets are affected by the COVID-19 epidemic and the recovery of orders is slow, which has put great pressure on cotton prices. After a period of digestion, the current bottom price is the result of market self-regulation. Once the fundamentals change slightly in the later period, cotton prices will still be very willing to repair themselves. Of course, the price movement is also one step at a time. Only after reaching a certain level can we have the opportunity and ability to continue to rise.
At the current price, except for industrial customers, there are very few speculative bulls who are going to drop the price, because it is not cost-effective to do so, the risk is huge, and the profit is small. Therefore, only industrial hedging customers now have the demand and willingness to establish short orders. Of course, for these customers, it is only possible to take advantage after the price rises to a certain level. Therefore, the market needs to rise to provide hedging opportunities, because some trading companies have already begun to hedge cotton for the new year. Of course, we will also find that once the market falls, Zheng Mian will immediately trade at a certain price. Therefore, the room for decline in the market is limited, and ultimately forms a range-bound pattern. Therefore, the shock will continue, and when it will end, we will have to wait until at least the new year. </p
