As the number of new confirmed cases in Italy shows a decreasing trend, EU countries have strengthened epidemic prevention and treatment measures, and Wuhan, China has lifted the control on the passage from Han to Hubei. The expectations of all walks of life in the market that the new crown epidemic can be controlled as soon as possible have increased, and some bargain hunting funds are eager to try. . Today, Zheng Cotton surged higher, breaking out of a long-term rebound, causing constant controversy among all parties in the market about the reasons behind it.
This morning, Zheng Cotton’s main CF2009 contract opened low at 11,125 yuan/ton, then rebounded sharply after a slight shock, climbing all the way to a high of 11,750 yuan/ton, and then fell back slightly. The rapid increase this time has left many industry players a little confused. In the context of the current epidemic dominating the market, there are no changes in the fundamental market structure, and there is a lack of hype on related topics. Who is the driving force behind it? Most industry players can only look for cause and effect, and speculate on the driving factors behind this rebound.
A simple classification is as follows: Some people believe that the early futures price discounted the spot price seriously and has fallen too far below the cost line. The cotton price is undervalued and a rebound is natural; other related speculations believe that the futures price will be higher. Most of it reflects expectations for the future cotton market. The current market expectations for the impact of the epidemic have weakened, and are gradually tilting towards planting expectations for the sowing season. Planting intentions in many countries around the world have declined, which is good for rising cotton prices; some people speculate that it may be related to the recent Relevant agencies predict that India will become the next global outbreak point. India is the world’s largest cotton producer, and local cotton is about to enter the sowing period. If the cotton planting area drops significantly, coupled with the expected decline in planting intentions in the United States and China, industry players believe that the follow-up will inevitably affect global cotton production. There are countless related speculations today, which to a certain extent also reflect the market’s strong desire to rise.
Recently, the situation of downstream textile enterprises is still severe, and some yarn mills have begun to sell yarn at reduced prices to avoid market risks and ease financial pressure. At present, domestic demand continues to be sluggish and supply is relatively loose. However, it is still unclear whether the global epidemic can change and whether an inflection point has been reached. Therefore, periodic policy stimulus and financial push may cause cotton prices to deviate from the normal trend. It is recommended that industry players wait and see and enter the market cautiously. </p
