Cotton Is Facing Downside Risks In The Short Term And Is Sought After By Market Funds.

Recently, there has been a hurricane in the commodity market, especially the black craze soaring, attracting the market's attention.

In fact, in this round of rising prices, the frenzied degree of cotton can not be underestimated.

Since April 8th, cotton futures have risen by more than 30%.

With the rising trend of cotton prices, cotton is also sought after by market funds.

Just last week, the volume of cotton futures traded on the Zhengzhou Mercantile Exchange was equivalent to 41 million packs in the world, reaching the highest level in more than five years.

The reason why cotton futures are so hot is mainly the record low prices in February and March, which stimulated the interest of buying and selling inside and outside the industry. At the same time, it also led to speculation in the market. At the same time, the popularity of cotton and market in the cotton market was rapidly pformed from bear to bull.

Mei Yong analysis, general manager of China cotton information network, said that the recent surge in cotton prices is actually due to the fact that many people are turning short.

The Bulls actually have some basic support. First, the spot margin of the domestic cotton market is less and less.

Up to April 20th, there were only about 700000 tons of cotton in the warehouse. Such a large amount of inventory digestion would have a huge impact on the market.

In addition, March is the traditional peak season for textile production. After the Spring Festival, the price of cotton is going downward. In fact, the price of cotton has narrowed to 1000. The original price is 5000. Now it is 1000, so the competitiveness of textile is still very strong, which constitutes a support to the fundamentals.

The other is that the bargaining power of textile downstream is strengthening.

Finally, there is a change in policy on the basic level. The reserve cotton liner has been postponed to May 3rd, which is actually delayed by about a month than the expectation of that time.

Since April 23rd,

Pull up the highest limit of September contract also gradually down, in recent days, Zheng cotton is in a downward trend overall.

Gao Xin, a cotton researcher and agricultural product analyst at new lake futures, said he had little change in fundamentals at the end of March and the beginning of April (that is, before the market started).

He said that the surge in the cotton market is mainly driven by speculative capital. From the perspective of many measures, it should be from outside funds, such as stocks and bonds, rather than downstream.

As a whole, the recent rise has been overdrawn.

He believes that the short-term market supply of goods is relatively insufficient before the fund is tossed and sold, plus the protection before the holiday, when the time is bad, the price return to the fundamentals is expected.

Gao also said that in May 3rd cotton reserves began to compete.

The willingness to hoard goods will be further reduced, and cotton prices will still face downside risks.

He predicted that cotton price will return to 12000, which is likely to reach 15000 yuan / ton in the second half year (that is, the new year).

Recently, the rapid rise of commodities has aroused the concern of regulators. In view of the recent abnormal rise of domestic cotton futures prices, the national development and Reform Commission convened an urgent meeting of relevant departments in the afternoon of April 20th. Judging from the recent trend, the trend of price rise has not been suppressed by policies, but some analysts expect that there will be other policies in the market.

The analyst said that the rapid rise of cotton led to a lot of discussions in the spot market, and policy pressure increased or led to a certain degree of adjustment in cotton prices.

But from a fundamental perspective, there are signs of recovery in the lower reaches, and this year's domestic cotton production is obvious, and the market outlook is still more optimistic.

Whether the downward trend is in the form of a pullback or a continuous rise? Mei said that the pressure of rising again is relatively large. She said that the first round of the leading role has already retreated, and that the investors are coming in from behind. The characteristics of the funds are that the wind runs more. Therefore, she thinks there is a pressure from the structure to go up again.

She believes that after this round of cotton rise, it will gradually tend to a relatively dull state, the relative reasonable estimate of this state is between ten thousand and twelve thousand, or between eleven thousand and twelve thousand accurately.

After a big rise, there must be a big drop. It is difficult to predict the specific price.