Zheng Cotton Has Long Been In Rhythm Or Near Critical Period.

2 since the end of the month, Zheng cotton has not seen the rise of the US cotton market, and has launched a trend of nearly one month.

Long plate will rise?

Or will it fall?

What is the domestic cotton market waiting for?

1 market situation

1, China's cotton reserves to complete the task of inventory basically completed

After nearly 5 years of effort, the task of storing cotton to stock is basically completed, and the stock of reserve cotton has fallen from less than 1100 million tons in 2014 to less than 3 million tons.

2, China's cotton social inventory rose as a huge warehouse receipts.

With the completion of the task of stocking cotton stocks, cotton social inventories continue to rise.

Reflected in the disk, the performance of Zheng cotton registered warehouse receipts increased to a record high.

3, China's $30 billion purchases to stimulate the US cotton continue to rise

According to the February 22nd public announcement, China proposed to purchase an additional US $30 billion agricultural product annually as part of the trade agreement between the two countries.

Stimulated by the news, the US cotton launched a sustained rise in the past month, narrowing the price gap between inside and outside.

2 market expectations

1, Sino US economic and trade relations

The phased normalization of Sino US economic and trade relations is bound to increase imports of US agricultural products.

If we directly increase the import volume of US cotton, it will directly stimulate the uplink of US cotton prices. If we increase the import volume of soybeans and corn, we will stimulate the price of soybeans and American corn, which will create a pressure on the sowing area of US cotton and indirectly benefit the trend of US cotton prices.

2, China's cotton regulation policy

The relevant department heads said at the industry meeting that China's cotton gap is mainly made up by imports. The main purpose of the regulation is to control the cotton price difference at home and abroad within a reasonable range and maintain the international competitiveness of the domestic cotton textile industry.

In terms of the allocation of cotton quotas, we should break the inherent pattern of interests and enhance the competitiveness of the whole cotton textile industry.

3, huge warehouse receipts delivery pressure

Looking back in 2017/18, Zheng cotton's huge warehouse receipts continued to shift, resulting in the final contract CF1901 falling to 14000 yuan / ton.

During the continuous shift of Zheng cotton warehouse receipt, the far month contract maintained a high level of price difference compared with the recent month.

The CF1905 contract is about to go into deliveries. The pressure of warehouse receipts is even higher than that of the same period last year. The pressure on Zheng cotton prices should not be underestimated.

3 trend prediction

1, China's cotton reserves to a safe level, the world's cotton production is expected to be strong, cotton prices in the year is difficult to rise significantly.

2, Sino US peace talks are the main factors that affect the rhythm of Zheng cotton.

The delivery pressure of large cotton warehouse receipts is deterministic, but the time node of Sino US peace talks is uncertain.

If the Sino US peace talks were earlier than the fermentation pressure of warehouse receipt delivery pressure, Zheng cotton would probably move out of the trend ahead of time; if the Sino US peace talks were later than the pressure of warehouse receipt delivery pressure, Zheng cotton might get out of the trend of first and then suppress.