Zheng Cotton Futures Prices Continue To Oscillate In The Range Of 15200 To 15800 Yuan / Ton.

Cotton futures bottomed out at the end of 2018, and rebounded under the influence of a warmer macro and a better inventory structure.

At present, the low point is steadily rising from the futures market. The moving average system has formed a long trend, and it can start a wave at any time.

But can it really rise in the short term?

The author tries to answer this question starting from the spot supply structure of domestic cotton market.

As of the end of February, domestic business inventories were 4 million 565 thousand tons, of which Xinjiang warehouse cotton inventory of 3 million 837 thousand tons.

Next, we will focus on the relationship between the 3 million 837 thousand tons of Xinjiang cotton's digestive path and the futures price trend.

North Xinjiang cotton has set up base price will support futures.

At the end of 2018, futures prices declined all the way, and some Xinjiang cotton, especially the northern Xinjiang cotton, had realized the fixed price to the spot sale of textile enterprises because of the cost advantage.

Entering the 2019, Sino US trade consultation accelerated and continued to release optimistic news. With the support of the market sentiment and the centralized replenishment of the downstream textile enterprises before the Spring Festival, Zheng cotton 1905 contract took a wave in the beginning of the year, and speculated that about 250 thousand tons of Xinjiang cotton took the opportunity to carry out hedging.

So the question is, are these 250 thousand tons of the market digested?

Should not be, because then futures prices have been entrenched in the 15200 yuan / ton above, this part of the set of the most appropriate digestion interval is 14800 - 15000 yuan / ton, at present, the market has not yet given the opportunity to digest this part of the guarantee.

At the same time, the market is mainly imported cotton in recent years, and the market focus is not on Xinjiang cotton.

Next, if the macro positive effect declines and futures fall, then when the futures price falls below 15000 yuan / ton, the price advantage of this part of the base point price will be obvious, which will form a significant support for the disk.

A large number of Southern spot waiting for cover is the main source of pressure.

The imported cotton was the main market in February.

Between 2018 and January 2019, the spread between domestic and foreign markets expanded rapidly, and a number of domestic quotas needed to be used before 28 days. These two effects superimposed imported cotton into the pet market in February.

With the market's consumption of imported cotton, the low price imported cotton with early customs clearance is basically swept away. The remaining imported cotton is either following the price point of Zheng cotton futures or gradually raising the fixed price, and gradually lost the advantage of cost performance.

After the Spring Festival, the US cotton futures price climbed slowly after the stabilization of 71 cents / pound, and the cost of imported cotton rose.

Under such circumstances, there will not be a large number of cheap imported cotton flowing into the domestic market for a period of time. Therefore, the focus of textile purchasing will go back to the Xinjiang cotton market.

There are mainly two ways for spinning enterprises to purchase Xinjiang cotton, one is the base point price, the other is the purchase of fixed price cotton to the cotton ginning factory.

Generally speaking, when futures prices are low, spinning enterprises tend to base price, while when futures prices are high, spinning enterprises tend to buy cotton at a fixed price.

Then the question comes again. What kind of Xinjiang cotton will be digested first?

It depends on futures prices.

First, when the futures price is running in the range of 15200 to 15400 yuan / ton, the fixed price sale and the base selling price are similar, and the spinning enterprises can be purchased arbitrarily, resulting in the reduction of the spot resources of the cotton mill and the reduction of the futures price of the purchasing company, and the reduction of the warehouse receipt resources.

Second, when futures prices are running in the range of 15400 yuan to 15650 yuan / ton, textile enterprises will mainly purchase ginning plants at fixed prices.

Third, when the futures price is higher than 15650 yuan / ton, the Xinjiang cotton that sells at fixed price will flow into the basic purchasing company.

The basic purchasing company is currently using futures -250 yuan / ton (capital interest and warehousing fee) to add or subtract the quality of the price of the new water cotton.

Therefore, only when the futures price reaches 15650 yuan / ton, will the purchasing company be able to receive Xinjiang cotton and enter the futures market hedging.

At this time, the overlay of the ginning plant will be overlaid, and the pressure on the futures market will be extremely heavy. Therefore, it is difficult to break through 15800 yuan / ton in the case of a large amount of spot resources in Xinjiang.

Forecast and operation suggestion for future market

By analyzing the possible digestion path of domestic stock market, we believe that the next best period of time for the market is to oscillate in the range of 15200 to 15800 yuan / ton.

In the process of continuous oscillations, on the one hand, large quantities of warehouse receipts are digested through the base price in the low price area. On the one hand, the resources of the fixed price of the cotton mill are purchased by the textile mills in the middle and high price area to absorb the pressure, so that there is a greater contradiction between the supply and demand side of the cotton through vibration.

Based on the judgment that the cotton price will continue to oscillate in the next section, it is suggested that the textile enterprises should purchase the zhengmian futures at the price below the interval, and take the fixed price resources of the ginning plants along the interval.

Short term speculators are mainly focused on high dumping and low absorption.

For medium and long term investors, buying at the lower edge near the oscillation range is the best choice.