1. Peripheral markets
The U.S. is expected to raise interest rates in 2022, and the policy transition period will intensify global market turmoil; continuous expected interest rate hikes will cause U.S. capital to shrink global liquidity, harvest overheated economies, and create a round of “drawing money from the bottom of the cauldron”;
The Fed’s hawkish voice is loud and clear: it will raise interest rates six times in two years; all members expect to start raising interest rates next year, specifically three times in 2022 and 2023.
2. Domestic market
Central Economic Work Conference: Emphasizing that counter-cyclical policies must be stepped up to stabilize growth, the current triple pressure is: “demand contraction, supply shock, and weakening expectations.”
1. To correctly understand and grasp the characteristics and behavioral rules of capital, we must set up “traffic lights” for capital; several large domestic real estate companies with huge liabilities will review and reorganize to avoid larger financial events in the future, and at the same time release 1.2 trillion in liquidity on December 15.
2. The last time the Central Economic Work Conference drafted similar arrangements was in 2014. The draft of the meeting specifically pointed out that it is necessary to “focus on maintaining the economic operation within a reasonable range, strengthen and improve macro-control, increase the intensity of cross-cyclical adjustment of macro policies, and improve the forward-looking pertinence of macro-control”;
3. The two policies, one advancement and one retreat, and “prescribing the right medicine” are the main clues to promote growth in this round.
Summary: The United States tightens its currency and releases expectations for interest rate hikes, just to maintain the credit of the “US dollar”. Shrinking some liquidity and creating economic crises in other countries are often used “strategies”. The mid- to long-term distrust of the “US dollar” in the United States has caused domestic The vicious bubble situation will not change;
Domestic parties are clearly aware of the laws of entry and exit of “international capital” and have a good grasp of its characteristics.
Under the current abundant domestic liquidity, we should proactively supervise and review companies with huge debts to avoid the chain effects of uncertainty in the later period and take precautions before they happen;
Preserving China’s manufacturing productivity is the most fundamental, which is why the United States focuses on vicious and unreasonable sanctions on Xinjiang;
In the past 20 years, the game of large economies has never been far away. China has always adhered to multilateral trade, mutual benefit, not seeking huge profits, and working together to build a community with a shared future.
3. Twenty years of cotton textile
(Cheap grain hurts farmers, expensive grain hurts people/workers)
(Keep cotton prices within a reasonable range and never overdraw the future of cotton spinning)
The first stage
In 1999, my country liberalized the cotton market, and administrative pricing shifted to market pricing, requiring timely macro-control. From 1999 to 2001, my country’s cotton market began a transitional period of opening up. After the market was liberalized, the market expanded from major players to hoarding cotton, with the price rising within half a year. As high as 87%, the selling of reserves inhibited the continued rise of cotton prices. Khmer prices led to a significant increase in planting area in 2001, and a sharp decline during the transition period between the old and the new.
The second phase (2002-2004)
In 2002, the trading market launched electronic matching transactions of commodity cotton and pledged warehouse receipts; the era of Internet electronic trading began. In the past three years, cotton prices fluctuated the most. In 2002, cotton prices bottomed out and rebounded, and the “Wenzhou Gang”, one of the coal speculation funds, began The journey of elastic cotton was also caused by orders affected by SARS in the first half of 2003. After SARS, domestic textile orders flooded in. In 2003, yarn output exceeded 10 million tons for the first time; in 2003, panic buying and hoarding caused the acquisition cost to suddenly rise to 17,000-18,000 yuan; during this period, importers with Chinese prefixes ordered large quantities of foreign cotton. In 2003, the international cotton merchant “Daliwen” Futures are double-digit, and international cotton prices have risen sharply, boosting domestic cotton prices. On March 1, 2004, after the Spring Festival, a large amount of imported cotton arrived in Hong Kong. Macroeconomic control and monetary tightening tightened, and textile companies’ funds tightened. Cotton prices have been rising ever since. After falling, Zheng cotton futures were listed after June, which intensified the power of hedging. Cotton prices continued to decline, and the pace stopped at 12,000 yuan… Many of the “Wenzhou Gang” who invested in cotton speculation at that time became the owners of ginners and deeply cultivated the industry. Xinjiang.
The third stage (2005-2009)
Quotas are cancelled, demand is amplified, and purchases, sales, and reserves are adjusted stably.
In 2005, cotton prices bottomed out and rebounded by 2,500 points. The core was the cancellation of quotas, a surge in exports, and the reconciliation of Sino-European trade frictions.
In 2006, China’s cotton output is expected to reach 6.5 million tons, of which Xinjiang’s cotton output will reach a record high of 2.2 million tons. Domestic acquisition costs are high, and the price difference between domestic and foreign prices is too large. The price difference reaches 6,200 yuan. Quotas are distributed in a centralized manner, resulting in more abundant domestic cotton. The reduction in the export tax rebate rate intensifies the decline in cotton prices. During the acquisition period, the expected purchase and storage of 12,000 yuan and 300,000 tons has boosted the industry. acquisition and hoarding.
In 2007 (textiles are bought as needed, futures prices fell under the pressure of futures warehouse receipts; insufficient high-allocation resources triggered rising expectations, and the reduction in U.S. cotton production boosted global cotton prices); the U.S. cotton planting area dropped significantly, boosting prices this year.
In 2008 (the international super-large cotton merchant – “Daliwen” once again had a double multi-term impact on the price of US cotton under the background of a major reduction in US cotton production, encountered the subprime mortgage crisis, and suddenly went bankrupt). This year, external factors drove the domestic market higher, and futures hedging was the most A good time; the systemic crisis emerged and Zheng Mian gave full play to his power of value preservation) At the end of the year, the country stabilized market confidence and opened unlimited purchases and reserves of 12,600 yuan to stabilize and boost the market; 2.85 million tons were purchased that year;
In 2009 (after the country’s large-scale purchase and storage, market circulation was insufficient, futures prices rose all the way; after the economic crisis, area production was reduced, and futures discovered the actual value of cotton) national policies on cotton…The process of moving closer to cost;
Looking back at the bull market in 2010, the history of U.S. cotton Louis Dreyfus’ counter-pressing against Glencore has caused foreign cotton prices to rise sharply. This year, there has been tremendous pressure at 120 cents; next year’s December contract is 90 cents, with a price difference of 17 cents. point;
3. Future spot cotton prices will still depend on policies
China can no longer purchase reserves at high prices! History has proven that purchasing and stockpiling at high prices will lead to endless troubles.
(1) Futures cotton prices have fallen, and the country has promptly suspended the sale of the second round of reserve cotton. Market confidence is stable; but it is not bullish; (2) The current price difference between domestic and foreign cotton is still high, and spot market purchases are gradually moving towards 22,000-22,000. 23,000 cotton cost is close, or should we choose to shut down for maintenance? (3) It is recommended that the country use what it has been best at over the past 20 years, the “Form of Buying Xinjiang Cotton with Quotas,” to encourage textile companies to purchase and gradually return to reduce future costs and supplement the profits of textile companies; The quotas are also taken out, and can be matched with next year’s quota, or the year after that, to relieve the pressure of high-level integration this time;
4. How to use Zheng Cotton Futures tools?
The acquisition cost of new flowers this year is 22,000-24,500, and Zheng cotton can form part of the actual delivery if it is below 22,000.
Looking at the current Zheng cotton market, it can be said that there are many heroes vying for the throne. There are only unexpected predators and no unexpected opponents. First of all, in this game, most cotton merchants and ginners have high costs and have not participated. Some choose to exchange goods. Enter the forward; the large discount of futures cannot form short hedging, and there is no more funds to prepare for futures. What about textile companies? The cost of new flowers is high, but it is better to have more old crops. When futures fall, some people choose to buy futures.
Suggestion: Friends in the cotton textile industry chain, pay more attention to the near-term contracts (within 30 days), as futures and current prices are easy to link; buy futures when futures are cheap; never think that the futures forward is thousands lower, and buy at the bottom in anticipation; There are currently 1.2 trillion funds in the futures market, large fluctuations are the norm, and your leverage is the biggest uncertainty.
After four or five months, a large amount of imported cotton and imported yarn will arrive one after another, which will form a spot supply. Historically, a correction is inevitable. The current 05 price discount of 01 contract of 1,700 yuan also reflects this expected reality; therefore, friends in the cotton textile industry chain According to your own needs, pay attention to whether 01 and 03 are receiving goods or selling goods, and do not engage in the game of speculation in the 05 contract; we advise speculative funds, regardless of whether they are long or short, to “follow the trend and not use up all”, and never overdraw the future of cotton spinning; cotton reserves Resources have entered a historical low stage. In terms of policy, whether to consider planning, support and subsidies for some high-quality cotton areas in the mainland to appropriately make up for the future demand gap of more than 2 million tons per year.
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