Tang Zhen: Zheng Cotton Exposes Tusks And Does Not Rule Out The Possibility Of Raising 1000 Points.
As time goes on, cotton market is gradually gaining new opportunities.
Looking back at the previous period, in the late March, Zheng cotton futures entered a low level. The lowest level of CF1905 contracts had been tested at 15000 yuan / ton important integer pass, and the lowest breaking point of CF1909 contract was 15500 yuan / ton, which gave the market more or less a pessimistic atmosphere.
With the smooth progress of the Sino US negotiations at the end of the month, the economic data in March improved significantly, and Zheng cotton futures did not fail. Since April 1st, the attack has been successful, and has continued to rise from a wave of rising prices. This process is accompanied by a continuous increase in positions, especially after the 8 increase. In April 15th, it increased to 150 thousand hands. The main contract CF1909 exceeded 16000 yuan / ton integer mark, the highest reached 16225 yuan / ton, a new high in 2019 cotton futures, and then the market was obviously callback, but the trend is still good.
It can be said that the gold absorption ability of Zheng cotton futures has been a fire in the futures market recently. I believe it is both an opportunity and a challenge for the cotton industry and investors.
There must be a reason for such a deduction. Such a huge increase in the amount of money also indicates that the funds are good for Zheng cotton futures.
How should we look at it and deal with it?
First, there have been some noteworthy events in the past month.
According to the report issued by the US Department of agriculture in March 29th, the US cotton planting area was 13 million 800 thousand acres in 2019, a decrease of 2% compared to the same period last year, far below the market expected 1410-1550 acres.
Among them, the land cotton area is 13 million 525 thousand acres, a decrease of 2.3% over the same period, and the Pima cotton area is 255 thousand acres, an increase of 2.4% over the same period last year.
The largest production area in Texas and Georgia decreased by nearly 6% over the same period last year.
In March 2019, the cotton growers association of China Cotton Association conducted third surveys on cotton planting intentions in 2865 provinces in 12 provinces and autonomous regions of Xinjiang Province in 2019.
The results showed that the average cotton planting area in China was 47 million 380 thousand and 700 mu, down 3.35% from the same period last year, up 0.23 percentage points from the previous forecast of 3.58%.
In addition, the global supply and demand situation this year showed that the output and final inventory increased slightly, according to the USDA4 monthly report, but the adjustment was relatively small.
From a static point of view, the supply situation of the new year is not increasing, and the inventory is decreasing year by year.
Secondly, in April 11th, the spokesman of the Ministry of Commerce revealed that the leaders of China and the United States made a telephone call and discussed the remaining problems. The next step is to maintain close communication between the two sides' economic and trade teams through all kinds of effective ways, and go all out to carry out serious negotiations and work towards the implementation of the first important consensus between the two countries.
The market's expectations for Sino US trade negotiations have been good, but due to the fact that no substantial results have yet been made, of course, we still have to look at the uncertainties.
In terms of policy, the NDRC announced in April 12th that additional 800 thousand tons of cotton import quota will be issued, all of which are non state trading quotas, and the application time is 4 months.
The news came out, though it caused a fall in Zhengzhou cotton futures on the same day, but it did not prevent prices from rising sharply.
I believe that quota issuance is the first officer of policy regulation. Let's look at the reaction of the market first.
Relatively speaking, quota issuance is a way to break through the cotton trade channel between inside and outside, which is more conducive to narrowing the difference between inside and outside cotton prices.
Again, it is different from the economic downturn in 1 and February. In March, the PMI of manufacturing industry returned to the expansion area after 3 consecutive months below the critical point, rising to 50.5%, an increase of 1.3 percentage points from last month.
And in March, China's textile and clothing exports amounted to US $18 billion 182 million, an increase of 28.37% over the same period last year.
Among them, exports of textiles (including textile yarns, fabrics and articles) amounted to US $9 billion 524 million, and exports of garments (including garments and accessories) amounted to US $8 billion 658 million.
In the first three months, China's textile and apparel exports totaled US $56 billion 321 million, a slight decrease of 2.2% from the same rate.
The simultaneous improvement of manufacturing and foreign trade data has indeed boosted market sentiment.
In terms of cotton, according to the inventory data of 186 cotton delivery and supervision warehouses, social warehouses, bonded warehouses and processing enterprises in 18 provinces and municipalities in China, the total inventory of cotton business in the whole country was about 4 million 164 thousand tons at the end of March, representing a decrease of 401 thousand and 200 tons from the previous month, a decrease of 8.8%.
Cotton inventory data also show consistent performance with other data, which should be said to be a relatively favorable factor.
However, through market research, it is known that the current cotton industry is still cautious about the market, especially in the downstream, which is obviously weaker than that in the spinning market.
To sum up, the author thinks that the price trend of cotton must depend on the pformation of supply and demand. The general direction can be considered that if the country has not been rushing to take strict policy control in the near future, the price trend of Zhengzhou cotton is still the process of gradual lifting of the center of gravity.
As the market has more relaxed signs of capital environment, futures will certainly reflect the aspect of financial attributes. The economic data will improve and the trend of Sino US negotiations will be better. In fact, the funds in the period of policy gap are also reasonable. However, due to the more rapid and vigorous actions, it will cause the volatility of Zheng cotton futures to intensify. When the fundamentals have not changed drastically, the market participants must grasp the rhythm of the price trend and choose the trading strategy according to their position in the market.
Industrial operators and trend speculators can operate differently. Industrial operators should aim at pursuing stable profits. If they are not sure whether the future trend is unilateral, they can make more use of capital to promote arbitrage opportunities. In the process of operation, we should deal with the relationship between futures positions and spot positions. We must know how to act according to the rules of Zheng cotton futures, not blindly speculation, but not necessarily rigid.
Speculators can take the combined operation of long and short lines under the guidance of more definite factors, and hold positions in relatively safe low position layout.
In my view, the adjustment of the current situation relative to the previous period is 500 more stable trend, do not rule out the possibility of raising 1000 points, no matter what opportunities are left to those who are prepared.
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