The market has calmed down recently, and the space for cotton price fluctuations has narrowed significantly. After the early speculations calmed down, the cotton price has stabilized again around 14,800 yuan/ton. This is also where the costs of most companies lie, and the support is obviously strong. . As for whether it can be broken in the later period, the probability definitely exists, and some risk factors must have not been eliminated.
It should also be noted that now that we have entered the stage of spring plowing and sowing preparations, the risk factors faced by cotton production are also increasing. For agricultural products, weather is an eternal topic. Cotton is different from other growing crops. The production period is longer, and the weather risks it faces are greater. At every stage of emergence, flowering, budding, and wadding, weather disturbances will occur. poses uncertain risks to its output.
There is another special situation that needs to be explained this year is the price ratio between grain and cotton. Now that the price of grain is higher than that of cotton, it is worth paying attention to whether cotton farmers will abandon cotton and switch to grain. This is not only The problems faced by China also exist in other countries around the world, and the severity of this problem this year is significantly higher than in previous years.
The USDA’s intended cotton planting area report was released yesterday. The intended cotton planting area in the United States in 2021 is 12 million acres, a year-on-year decrease of less than 1%, and the upland cotton area is 11.9 million acres. acres, a slight increase year-on-year, and the Pima cotton area was 142,000 acres, a year-on-year decrease of 30%. Lower than market expectations. Of course, this is just a prediction. The actual results will depend on later data. In addition to the United States, the planting area in India, Brazil and other countries is also worthy of attention. After all, these countries have large production and export volumes.
From the perspective of supply and inventory, my country’s inventory scale is still large. There is still a large amount of cotton in the Xinjiang warehouse area. There is no problem with supply. We expect cotton prices to be better in the short term. The performance is unrealistic, and of course it is unlikely that it will continue to fall further. After all, the market has already digested it, and large inventories are not a problem for a day or two. Therefore, cotton prices are likely to continue to maintain range-bound fluctuations.
Recently, the epidemic in Europe has been making a comeback. Many countries have extended their blockades. The epidemic in the United States seems to have begun its third escalation. This is not good for consumption and is bad for cotton and other bulk commodities. The commodities are all the same, and the market decline once again proves that the quality of epidemic control has a clear impact on commodity prices.
No matter whether the commodity is in a bull market or a bear market, there will be long and short differences at any time period. The greater the difference, the greater the market. Only by grasping the main contradiction can we grasp the main theme of price operation. .
Now that cotton prices have stabilized, I think this is a good thing and is conducive to corporate procurement. When prices rise and fall sharply, companies dare not let go of taking orders for production. The author is still full of confidence in future consumption. In the first two months of 2021, many of my country’s economic indicators performed well – the country’s industrial added value increased by 35.1% compared with the same period in 2019, fixed asset investment increased by 35.0%, and total retail sales of consumer goods increased by 35.1%. 33.8%. Many experts predict that my country’s GDP growth rate in the first quarter is expected to exceed 15%, or even reach around 20%. It is the general trend for the economy to perform better after the epidemic, and the consumer market will also perform very well. China has made a good start for other countries. With the rapid advancement of vaccine injections, foreign economies will gradually emerge from the darkest moment.
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