In the past two weeks, the Zhengmian CF2109 contract has continued to consolidate at 15,500-16,000 yuan/ton. Because the policy, fundamentals, and external news are all in a “calm, calm” state, both long and short sides There is no very good theme or focus for speculation, and the trend of “tops at the top and bottoms at the bottom” on the market is quite obvious.
Although some cotton areas in Xinjiang were hit by strong winds, dust, rainfall, and low temperatures in mid-to-late May, farmers will promptly resow, replant, or replant other crops such as corn to reduce losses. To the lowest, as the weather turns sunny or cloudy around the end of May and the accumulated temperature slowly rises, the impact of bad weather on Xinjiang’s cotton areas will come to an end.
From the survey point of view, in contrast to the frequent “high and low” cotton futures in the past week or so, terminal prices of cotton yarn, gray fabrics and other terminal prices have remained stable, and the net profits of yarn mills have , production and sales rate and startup load are at a relatively high position, and the phenomenon of gauze accumulation is not obvious. The terminal’s acceptance and digestion ability of cotton prices are stronger than those in March/April, which theoretically supports the market of Zheng cotton.
Why did the bulls enter the market and lack the confidence to continue to pull up? Why did Zheng cotton fall after reaching 16,000 yuan/ton this round? The author briefly summarizes it as follows:
First, it is dragged down by the continuous sharp decline of bulk commodities. Since mid-May, the National Development and Reform Commission has made intensive statements on the recent sharp rise in commodity prices such as steel, nonferrous metals, and coal. It is expected that commodity prices will gradually return to the fundamentals of supply and demand. A few days ago, the National Development and Reform Commission and other five departments interviewed key commodity companies such as iron ore, steel, copper, aluminum, etc., causing most futures commodities to plunge again and again;
Second, the stability of return orders from Southeast Asian countries has weakened or may flow out at any time. As the epidemic in India, Pakistan, Bangladesh and other countries has been effectively controlled, the production capacity of spinning, weaving and clothing enterprises in various countries has begun to recover at an accelerated pace; coupled with the difficulty in improving the relations between China and Europe and the United States in the short term, and the continuous rise in sea freight and shipping space, ” “It’s hard to get a ticket” and other factors, the stability of export orders is poor, and my country’s textile and garment enterprises are becoming more and more cautious in accepting orders;
Third, the central bank’s policy is firm to stabilize leverage and liquidity. The tightening is obvious, and the flow of funds into the commodity futures market has decreased (social financing data in April shows that the liquidity contraction has officially arrived). According to industry analysts, although the Politburo meeting emphasized that monetary policy should still be prudent and not make sharp turns, loose liquidity cannot be equated with loose monetary policy. Overall, monetary policy will be in a period of structural adjustment with a balance between tightness and tightness, but the credit contraction will still continue, and the slope of the entire economic recovery will peak in the second quarter of this year;
Fourth is The recent increase in warehouse receipts of Zheng cotton has put certain pressure on the rebound of Zheng cotton. According to statistics, as of May 24, there were 20,333 Zheng Cotton warehouse receipts, 5,692 fewer than the same period in 2019/20, a year-on-year decrease of 21.87%. However, the decrease was significantly narrower than that in March/April, and the pressure on Zheng Cotton’s real supply increased. </p
