The Fed'S Rate Hike Is Expected To Further Strengthen The Cotton Market And How It Will Be Deductive.

The minutes of the Fed's November meeting suggest that the probability of raising interest rates by the Federal Reserve in December will increase sharply. Trump may launch a fiscal stimulus after winning the election, which also forces the Federal Reserve to make it as soon as possible.

Normalization, but the recent US dollar index has reached a new high this year, which has obviously crossed its original moderate upward channel.

In addition, Italy will open a constitutional referendum in December 4th. Judging from the current poll results, the anti constitutional amendment is in the lead. Once Italy's referendum is not passed, Lenzi resign, Italy may face the risk of leaving Europe, which will trigger fluctuations in the foreign exchange market and further push up the US dollar.

The accelerated US dollar may limit the Fed's pace of raising interest rates, so that once the Fed raises interest rates or trigges a temporary increase in the US dollar, the suppression of commodities will weaken.

We analyzed the history of major cotton spot prices in December and found that domestic cotton, imported cotton and domestic cotton.

And the probability of European cotton rising in December is no less than 60%, and the rise and fall ratio is far greater than 1, indicating that the spot price of cotton is more likely to rise in December, and the relative extent is relatively large.

Since November, heavy rainfall has occurred in some parts of the the Yellow River basin and the Yangtze River Basin due to the major cotton producing areas such as Shihezi, Akesu, Kashi, Hotan and other places in Xinjiang. Cotton picking is relatively slow this year.

According to the national cotton market monitoring system survey, as of November 18th, the national cotton picking rate was 95%, down 7.1 percentage points compared with the same period last year, a decrease of 5 percentage points over the past four years, and a nationwide sales rate of 82.1%, down 0.3 percentage points year-on-year, but 2 percentage points higher than in the past four years.

The United States Department of Agriculture released a report showing that as of November 20th, the United States

Picking progress was 67%, an increase of 6 percentage points from the previous week, but 1 percentage points lower than the same period last year, a decrease of 10 percentage points over the past five years, and less progress in picking.

Judging from the domestic railway freight pport situation, since the second half of the year, the domestic railway pport volume has increased rapidly, and the turnover mileage has also increased significantly, and the railway freight pport has become relatively tight.

In December, in order to ensure winter heating in the north, the pport policy of the country may be further tilted to coal and so on. It is estimated that the railway capacity will still be relatively tight in December.

Since May, the southern oscillation index has been in a positive position for 5 consecutive months. According to past rules, this may lead to weak La Nina phenomenon. The influence of La Nina phenomenon on China's weather may lead to cold winter this year. From the temperature change of major cities in China, the average temperature of the northern cities of Harbin, the central cities of Wuhan and Wuhu and the southern city Nanning in October is obviously lower than that of previous years, indicating that the weak La Nina phenomenon may have played a role.

To sum up, despite the anticipation of the Fed's interest rate increase, the strength of the US dollar may temporarily suppress the formation of cotton, but the current rapidly rising US dollar tends to be "cool" when the Federal Reserve's December interest rate increases "boots" landing. When the US dollar is lowered, the US dollar will weaken or weaken. This year's cotton picking process is relatively slow and the tight railway capacity may cause partial supply pressure. Under the influence of weak La Nina phenomenon, the possibility of cold winter this year still exists, and if it occurs, it may increase the marginal demand of downstream.

Therefore, uplink space still exists in cotton in December.