Zheng Cotton Violence Is Only A Matter Of Reckless Funding.

The oscillation rose channel, although the bull took the lead, the rally was dominated by small steps, which rose by about 300 yuan per ton in mid June. But after June 15th, Zheng cotton rose all the way to speed up. Once it was changed, the CF1701 contract rose 1800 yuan / ton in just 10 trading days. The increase of cotton textile mills, traders and analytical institutions were startled. Zheng cotton contracts entered

But as the CF1701 contract continues to jump sharply, the willingness of domestic ginning plants and traders to guarantee cotton for 2016/17 has also increased rapidly. The 14000 yuan / ton has become the yardstick for entering the market. With the breakthrough of 14500 yuan / ton in the CF1701 market, the sale of hedging has become the consensus of some cotton enterprises in Xinjiang and the mainland.

Is the current hedging at that time? The author thinks that hedging is still prudent, and the risk of hedging is not high if the supply and demand conflict is not solved.

First of all, the reason why funds dare to stir up trouble is that the US dollar has plunged and the commodity rebound has been good except for the United Kingdom. The main cotton producing area and the expected decline of planting area also play a role in boosting fuel. The most important reason is that the capital, the auction of National Cotton Traders and so on, the average daily output of the national cotton reserves can not be peeled, and the domestic cotton resources are in short supply.

Become the only channel for more than 90% cotton textile enterprises to replenish raw materials inventory, and the capital is blowing up the bubble.

Once the relevant departments have stepped up regulation and control, the national cotton reserves will be launched more or less every day, and the market will soon become apparent.

current

Violent rise is just a matter of reckless capital and not sustainability. It will be like a flood when it comes to a mountain.

Second, what support does Zheng cotton have for such a high price? Who will come?

According to the investigation and calculation, with the 12500-12800 yuan / ton paction price of the current state storage cotton, the spinning C32S yarn is slightly profitable or the production and marketing are flat, and the small and medium mills in Henan, Hebei, Shandong and Jiangsu and Zhejiang provinces (leading varieties C21S, C32S, C40S) are reflected in succession. In June, the production has no profit map, and the current only is to maintain production.

Some textile enterprises said that for the current market 2015/16 new cotton, 2012 and 2013 national cotton reserves frequently 13000-13500 yuan / ton of quotations, cotton mills simply can not digest, 21S, 32S yarn orders, the production and production will be strong.

According to feedback from some foreign trade companies, the order of cotton yarn and grey fabric has gone downhill in June. Orders for low count yarn and low count fabric returned from Southeast Asia and other countries are gradually coming to an end.

In addition, the huge stock and consumption capacity of the State Reserve determines that the cotton price in 2016/17 is unlikely to soar.

According to the calculation of 700 thousand tons of cotton consumption (consumption is dynamic), the cotton stocks in the 3 months are still at least about 8000000 tons, which is still at the top of the mountain. In the year of 2015/16, whether the purchase of Xinjiang or the mainland is more than 70%, the deficit of the processing plant is more than 70%, and the ginning plant of 10% cotton mill has a profit margin, so that the domestic purchasing body of the 2016/17 is in a big decline. Therefore, the purchase price of the seed cotton is reduced by the ginning mill (the price of 7 yuan / kg is the expectation of most of the ginning plants), and the larger profit margins can be reserved before entering the market. Otherwise, the selling price of lint cotton will go down all the way, and the purchase price of seed cotton will continue to climb. As of June 28th, the total volume of State Cotton Storage exceeded 1 million tons, and is currently on the market for 3 months from the new cotton market, even on average every month.