Can The US Cotton "One Yang Change Three Views" And "Cotton Cattle" Continue The Legend?

"Even the beauty of cotton has gone up, it's really a three views!" recently, the soaring sky of the United States cotton has become a hot topic in the futures investment circle. Investors believe that the momentum of the rise of the cotton with the United States cotton is difficult to continue, so the empty one, it is not sure to be washed out. It is worth noting that, A shares, related stocks also follow the "cotton cattle" to start, Dunhuang seed industry in the three trading day rose more than 10%.

Cotton futures have always been legendary, and the myth of "rich soup savage" Lin Guang Mao's wealth creation is still a delight. So this time, can "cotton cattle" create the myth of wealth again? Since the US Department of agriculture (USDA) issued the 2017/2018 global cotton supply and demand forecast, the US cotton contract in July has gone up like a rainbow.

From May 11th onwards, the US cotton July contract has risen to 12.12% so far, rising to 87.18 cents / pound in the market, reaching a new high of more than two years. However, in May 16th, the US cotton July July plunged and plunged 4.87%. Under the impetus of the US cotton and the continuous strengthening of domestic Zheng cotton, the zhengmian 1709 contract rose 4.38% in three trading days from May 12th, reaching 16540 yuan / ton at the highest level, and broke the high point of nearly two months. It was the May 15th surge that easily defeated Mr. Sun's empty list.

Fu Bin, deputy director of COFCO Futures Research Institute, said in an interview with the China Securities Journal reporter, first of all, according to the US Department of agriculture's May supply and demand report, 2017/2018's global cotton supply and demand boom is still a year of insufficient production, and the gap between production and demand is smaller than previously expected. However, the trend of global cotton market going to inventory is still in, and the pattern of cotton price shocks has not changed.

Secondly, the export of American old works has been very beautiful. As of May 4, 2017, the US signed a net total of 3 million 205 thousand tons of cotton for 2016/2017 and completed 101.5% of its export forecast. This resulted in only 697 thousand tons of cotton inventory at the end of the US's old cotton business, while the inventory consumption ratio was at a low level of 18%. The US cotton July contract represents the last major contract on behalf of the US cotton trade, reflecting this tense fundamentals.

"Under such background and condition, the US cotton July contract has become the ideal battlefield for the fund to sell its position without price. Starting from April 2016, the net long positions of ICE futures and options began to increase rapidly, and cotton at historic lows formed an obvious value depression, and the demand for allocation of cotton by international fund was unprecedentedly high. Fu Bin said.

Data show that as of May 9, 2017, the US cotton futures and options fund held more than 111529 net positions, equivalent to about 2 million 450 thousand tons of cotton, at a historical high level; the fund accounted for 37.5% of the net position, which is obviously the main force in the ICE cotton market. And the past US cotton rose mostly accompanied by an increase in net funds, and the two had obvious positive correlation. At the same time, the sale price of ICE cotton is still at 113144 historical highs, which is equivalent to about 2 million 490 thousand tons of cotton. They are acting as rivals for the fund, and I am afraid they will not escape the run.

"As of May 2nd, the US cotton futures + options fund held a net share of about 40.32% of the total position, which is at a historical high." CITIC futures researcher Wang Yan also pointed out that the US cotton non point price contract volume is at a historical high level, superposing CFTC, the US cotton fund net many positions are at a high level, and the external disk drives the internal disk to appear the stage fast rise.

Liu Qiannan, a researcher at Galaxy futures textile department, also pointed out that the signing and shipment of US cotton is very good, leading to the fact that the amount of cotton left in the United States is still small, plus the fact that the price of unordered orders in the July contract is very large. If traders close their short positions in the short term, it is bound to cause the market to surge. In addition, the large number of contracts held in July and a large number of non-commercial long positions have given the US cotton more opportunities for short-term soft landing.

"Sensitive funds, caught the mistakes made by traders, made us cotton rise." Xu Sheng, a soft goods researcher at Huatai Futures Research Institute, also said that there are still a lot of unpriced cotton in the US cotton contract in July, which means that some traders are over hedging or speculating.

Cotton futures are legendary in history. China Securities Journal reporter combing found that from December 2008 to 2011 January, cotton index rose from 11295 to 31387 points, or 177.88%. Almost the same period. A shares Related stocks out of the crazy market, the new agricultural development period rose more than 250%, the new shares during the period also rose more than 210%.

The bull market has created the wealth myth of Lin Guang Mao, a "savage savage". At that time, Lin Guang Mao insisted on 26 months. In 2010, many cotton holdings held 30 thousand hands and earned 220 times to 1 billion 300 million yuan. In 2011, 100 million yuan of empty cotton and 10 thousand hands earned another 700 million yuan. His overall profit in the market is 2 billion yuan. In the near future, "cotton cattle" again when the fun, A shares some of the concept stocks also rose significantly. Since May 12th, Dunhuang's seed industry has risen 10.22% in three trading days, while Guan Nong's share has risen 3.26% in four trading days. The first three trading days this week, the development of new farmers also rose 5.18%.

"Dunhuang seed industry has seen significant inflow of funds over the past 5 days, and the trend is stronger than the industry index and Shanghai Composite Index. The performance of stocks is definitely related to the speculation of basic information. In its operating range, including cotton and seed sales, cotton prices fluctuate short term to drive stock valuations. CITIC futures Fu Xiaoyan pointed out.

"In the short term, the stronger prices will have an impact on stocks, especially in the market as a whole." Liu Qiannan pointed out that, however, this round of cotton rise is not determined by supply and demand factors, and the fund will try to make quick decisions, which will determine the short term of the rising market. Fundamentally speaking, the cotton planting area in the world has increased in 2017/2018, and the cotton planting area in China is expected to increase. Especially in Xinjiang, the increase of cotton planting area is expected to be more obvious, and the seed demand will increase, which may have a greater impact on the concept stocks. However, cotton seeding has been basically completed at present, and it is not expected to affect the concept stocks in the later stage.

The short term strength of cotton will have little impact on the whole stock market. If cotton prices rise, if they can not be fully spanmitted, they will be bad for the downstream textile and garment industry. In the agricultural sector, cotton sales account for relatively large share of the main business income. For example, Dunhuang seed industry, in 2016, cotton sales accounted for less than 10% of the total revenue, and the cotton sales cycle was long and the annual price fluctuated greatly. The related enterprises would choose the hedging lock income, and sales revenue would not benefit much from the short-term price rise.

"Recently, several clients have consulted the US cotton trading account and are eager to participate in the US cotton futures market in July. Insiders told the China Securities Journal reporter that the cotton market is attracting high attention to capital. Then how long will the "cotton cattle" last?

" American cotton The market in July has not yet ended, the market will be very large, and the limit of several trading stops is normal. Fu Bin said that if the cost of cotton exports to the United States in other parts of the region is calculated, the US cotton contract in July will theoretically reach 93 cents / pound. In the future market, we must keep a close watch on the situation that the fund is more net and not priced. This determines how far the market will go.

The domestic market has not been so popular. Zheng cotton's September contract represents the last main contract of China's old cotton. However, 16500 yuan / ton is a relatively heavy pressure level, and it is not suitable to catch up. Domestic multi opportunities in the 1801 contract, if the Zheng cotton 1801 contract can give a price near the 15600 point, it may be a better long-term long entry opportunities.

"The US cotton rise will guide the future market." Xu Sheng also believes that the current domestic cotton rise is temporarily lacking in obvious promotion, and domestic industrial and commercial inventories are still relatively high year by year. Meanwhile, the downstream cotton and yarn also do not buy Cotton's rise, so short term cotton will fluctuate near 16000. But in the long run, with imports cotton And cotton yarn cost rise, as well as the situation of dumping and storage gradually brighter, medium and long term cotton prices are more optimistic.

However, Liu Qiannan believes that the external market, the 2017/2018 cotton planting area increased, the current round of July contract rose, but the December contract rose significantly less than the July contract, partly because the next year cotton production is expected to increase significantly, so the external market can not continue, after the rise may face a big drop. In terms of internal supply, there are reserve cotton. In addition, as at the end of April, the total cotton business inventory in China still has 1 million 870 thousand tons. From the supply point of view, the domestic market is short of cotton in the short term.

"This cotton rush is a good opportunity for intervention." Xu Aixia believes that in the current situation of the domestic market, there is an increasing trend in the stock of downstream cotton yarn and grey fabric. Recently, the purchasing strength of textile enterprises has been weakened, and the supply of cotton in the market is abundant. It coincides with the delisting of contracts in May. Along with the decline of American cotton, the pressure is still greater than that in the later stage of Zheng cotton.

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