Cotton Prices Remain High At High Callbacks.

Since the introduction of a series of regulatory policies in mid November, the effect of stabilizing the market is more obvious.

Period

Price regulation, short-term pressure on Zhengyang cotton

In November, CPI rose by 5.1% compared with the same period last year.

Among them, food prices rose by 11.7%, pushing CPI up 3.8 percentage points, contributing 74%.

China's CPI has even reached a record high, making the market's expectation of increasing regulation and control of the country more and more intense.

Last weekend, the central bank's decision to raise the benchmark interest rate for a one-year deposit and loan also supported this view.

At the same time, at the central economic work conference ended recently, maintaining price stability has become one of the main tasks of next year's work.

The price of cotton and other agricultural products will rise too fast, which will become the focus of regulation of the government, which will bring some pressure to the trend of Zheng cotton futures in the future.

Phased supply increase

The supply side: on the one hand, to stabilize the country.

Downstream sales close to off-season

After the new year's day, textile and garment enterprises will enter the off-season production.

From the present

Despite the long-term supply and demand relationship, China's cotton industry demand gap will basically become the norm.

However, at present, under the condition of policy adjustment, the supply of cotton is increasing and the demand for downstream is fading, the pressure of Zheng cotton's high callback is still too large.

Technically, Zheng Mian 1109 contract 5 days and 10 days of moving average have already been running downward.

In operation, we believe that a small amount of intervention can be considered in the vicinity of 29000 yuan / ton and pay attention to stop loss.