Last week, Zheng cotton experienced a slight rise in the market. Driven by the overall warming of the commodity atmosphere, the main contract of CF2205 exceeded the 20,000 yuan/ton mark. However, the increase at the end of the session failed to hold. Although the short-term cotton futures price It is gradually returning, but there is still greater pressure on the far-month contract.
According to the latest weekly purchase and sales report released by the National Cotton Market Monitoring System, as of December 16, the national sales rate was 13.4%, a year-on-year decrease of 20.3 percentage points, and a decrease of 14.8 percentage points from the average of the past four years. It is reasonable for new cotton sales to encounter obstacles. Cotton prices are at a high level and product inventories of downstream companies continue to accumulate, which is not conducive to large-scale purchasing and stocking by companies. We are currently in a stage where supply is sufficient but consumption is insufficient. Poor downstream demand makes it difficult to support a sharp rise in cotton prices. Cotton technically harvested an upper shadow line last Friday, which also means there is greater pressure from above.
The current COVID-19 epidemic has a tendency to come back again. New cases continue to increase significantly internationally, and there are also signs of point spread in China. In addition, epidemic prevention becomes more difficult in winter, leading to the risk of intensifying market shocks. Faced with the risk of cotton market fluctuations, upstream companies continue to store cotton to hold up the price, hoping that future market prices will provide hedging space, while downstream companies buy as they go and purchase cautiously to deal with market risks. The game between the two parties will continue in the future, especially in the past. In the next two festivals, the operating rate of enterprises is expected to continue to decline, which is not conducive to cotton consumption in the short term.
Under the conditions of cost-end support, Zheng Mian will maintain range operation. Although it is not easy to break through upward, a sharp decline is not realistic. For enterprises, in the face of many uncertainties in the future, how to control risks is the first priority.
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