Zheng cotton futures continued to rise this week, with the main CF2009 contract once rebounding to the highest point since April of 11,955 yuan/ton, and the spot price of Xinjiang 3128B lint cotton also rose to more than 12,000 yuan/ton. Spot futures prices have risen, market mentality has been restored to a certain extent, and some speculators’ willingness to go long has significantly increased. However, today Zheng cotton fell slightly. What is the driving force for the short-term cotton market trend? How to judge it?
Many countries in Europe and the United States have recently relaxed anti-epidemic controls. Italy, Spain, Nigeria, Ohio, and other places have begun to allow some people to return to work, and have opened construction sites, parks, and libraries. Several German states have allowed more shops to open, and the British Prime Minister has also announced a travel roadmap to lift blockade measures. With the epidemic situation turning around in many countries and the stimulation of multiple good news such as progress in vaccine research and development in the United States, cotton market participants’ expectations for a rebound in demand have significantly increased, creating a good environment for the recent rebound in cotton prices.
The panic caused by the expansion of the epidemic is easing, but the heavy losses suffered by the cotton textile industry chain still make it difficult for many industries to let go immediately. Due to the loss of a large number of export foreign trade orders in the early stage, the business of many yarn and clothing companies was temporarily stagnant, and production income suffered a huge impact. Some foreign trade company sales staff even went abroad to implement the export freight orders. Although cotton prices have rebounded recently, it is more of a concentrated reflection of investors’ market sentiment. The return of orders from cotton textile companies has not occurred on a large scale. There is still a deviation between the short-term cotton demand recovery and the price rebound rhythm. The recovery of downstream demand is slow, to a certain extent. Dragging down the continued rebound in cotton prices is a threshold that cannot be crossed. Therefore, cotton prices are currently in a phased adjustment period. In the later period, as the upstream and downstream operations of the industry improve, they may once again provide support for the rebound of cotton prices.
It can be seen from the above points that cotton prices do not yet have the conditions for a sharp rebound in the short term. It is recommended that people from all walks of life be cautious in their bullish outlook. At the same time, it is necessary to pay close attention to the startup of downstream textile enterprises, follow-up of new orders and consumption of raw material inventory. </p