Yarn "Out Of Stock" Fear Of Difficulty, Zheng Cotton Lower Probability.

In the past two months, Zheng cotton 1201 the contract has been running in the range of 0.382 to 0.5 of the golden section line. Although there are signs of 10 week moving average on the 5 week moving average line, the weekly K line is still suppressed by the 10 week average. On the basic level, the macro atmosphere is tightened and the yarn is tightened. Stock The adverse effects of the increase and the rumour that textile export tax rebates may be lowered in the middle of the year are still relatively large.

　　 High inflation policy faces empty space

In May, China's CPI rose 5.5%, a 34 month high, indicating that domestic inflation pressure is still high. Since then, the central bank has announced another 0.5 percentage point increase to the reserve requirement ratio of 21.5%. Unlike in the past, this time it was carried out above the 7 day repo rate of 4%, while the previous recommendation was implemented in the 7 day repo rate down to 3% below, and tightened beyond expectations. At the same time, this also exacerbated the market's worries about the tight funds in the cotton industry chain. Therefore, on the policy side, we maintain a cautious view of the commodity market.

Yarn "out of stock" is difficult.

It is understood that at present, most textile enterprises maintain low inventory of raw materials, but yarn stocks continue to increase. By the end of 5, the yarn stock of national textile enterprises was 22.08 days, an increase of 28.7% from last month. In order to ease the pressure of funds, textile enterprises have been reducing sales promotions, but at present, middlemen are not optimistic about the market, and the purchasing methods have changed. In addition, in July will enter the textile market consumption off-season, yarn "to inventory" fear is difficult. Once the inventory problem can not be successfully digested, cotton prices will fall below the shock interval.

　 　 Export tax rebate Worries remain

It has been reported that textile export tax rebates will be lowered in the middle of the year, but the profit has yet to materialize, and the fear of textile exports will not be affected once it is implemented. Looking back at the trend of the Zhengzhou cotton market after the reduction of textile export tax rebates since the cotton futures market was launched, we found that the reduction in export tax rebates will be a catalyst for the decline in the downtrend, while the downtrend in the rally will not have much effect on the market, and the market will probably continue to rise. In the light of the current trend of Zheng cotton, we believe that the export tax rebate will be interpreted by the market as a bad thing, or will trigger a further exploration of Zheng cotton in the future.

On the whole, we believe that the trend of Zheng cotton's later stage is not optimistic. At the same time, in view of the US Department of agriculture's report on the new cotton inventory consumption ratio of the world, we lowered the downward adjustment of zhengmian 1201 contract to 21500 yuan / ton. In addition, investors should also pay attention to the weather during cotton planting and the inventory clearance of finished products in textile enterprises. If the weather is unfavorable or the inventory digested smoothly, the cotton price will still be strong in the later stage.