Price Differentials And Other Factors Will Lead To A Slight Rebound In Cotton Prices.

The appreciation trend of the RMB exchange rate has not changed, but the short-term rise will be inhibited by the strong US dollar.

In October 13th, the interbank foreign exchange market was quoted at 7.9116 against the central parity of RMB, an increase of 29 points from 7.9087 last weekend.

The continued decline of crude oil prices has eased the US inflation pressure to a considerable extent, and the expectation of the Federal Reserve's interest rate hike is increasing.

Meanwhile, the US non farm payrolls data released in early October were better, real estate and capital markets performed moderately, the economy grew moderately, and the peripheral exchange rate was relatively weak, so the US dollar showed strong short-term strength.

Affected by this, this week's appreciation of the RMB exchange rate has been suppressed, slightly callback, along the 7.9 front-line lateral fluctuations.

As the impact of RMB exchange rate elasticity will not disappear, and the trade surplus will continue to grow, the pressure on the appreciation of the RMB exchange rate in the medium term will still exist. It is expected that the latter will enter the 7.8-7.9 range, but the short term acceleration will be inhibited by the strong US dollar.

The long-term market performance of the company is slightly stronger, and spot pressure growth is limited.

On Wednesday, the market was basically synchronous, and the forward market performance was slightly stronger, and the overall short atmosphere was strong.

Zheng cotton liquidity risk slightly improved, the market pactions and positions have been enlarged, but the absolute value is low, it is not enough to drive the bull market.

As of October 13th, the total amount of 378 cotton warehouse receipts (including effective forecasts) increased by 221 compared with last week.

This week, Zheng cotton held 16827 positions, 6272 more than last week.

The current situation of the premium and the production cost of the warehouse receipts will continue to restrict the spot traders to make warehouse receipts in the later stage. In the short term, the growth rate of spot pressure should be rather limited, and the growth rate of the futures market will be slow.

The balance between the inside and outside cotton prices and the short staple price difference and the lower spot pressure will provide a lot of support for the domestic cotton price.

After the previous fall, the domestic cotton price dropped to a great extent.

The purchase price of seed cotton remains slow. The rigid gap of demand will drive prices up in the middle and late stages of purchase. However, as the appreciation of RMB will continue to inhibit cotton price upward through the demand of textile industry, the uplink space of cotton price in the later stage should not be overexpected.

As a whole, the price differentials will push cotton prices down. Cotton prices are expected to rebound slightly in the middle and late stages of seed cotton purchase. In view of the difficulty in revival of futures market, it is advisable to remain on the sidelines.