Can Zheng Cotton Futures Reproduce Last Year'S "Red May" Market?

Since January this year, the trend of Zheng cotton futures is similar to that of last year, but overall, this year's trend is strong.

With the approaching of May, whether or not Zheng cotton futures can reproduce the "red May" market has become a hot topic of the market.

Judging from the market situation this year, I believe that it is unlikely that Zhengzhou cotton futures will reproduce "red May" this year.

In May last year, the main reasons for soaring cotton futures were as follows: the state departments concerned announced late issuance of cotton import quotas, and the market was worried about the spot supply of cotton; two, the global cotton production forecast in 2018/19 was slightly lower than that in 2017/18; three, during the sowing period, some gale weather occurred in some parts of Xinjiang, and speculators deliberately exaggerated the news, which aggravated the market panic. Four, the Sino US trade friction had not yet affected the export of textiles and clothing, and the textile mill "run alone" provided consumption support for cotton prices; five, the quantity of Zheng cotton warehouse receipts was not very large, only about 200000 tons.

This year's situation is quite different from that of last year: first, the relevant departments of the state announced in April 12th this year the announcement of the issuance of 800 thousand tons of quasi tax quotas for cotton imports in 2019, which eliminated the anticipation of tight supply in the spot market ahead of schedule; two, the global cotton output forecast increased by 1 million 500 thousand tons in 2019/10 compared with that in 2018/19; three, the Sino US trade negotiations failed to speak for a long time, and there was "night long dream", and the market wait-and-see psychology gradually strengthened; four, the Zheng cotton warehouse receipt had reached about 700000 tons, a record high, and a substantial pressure on the real market.

At present, cotton planting in the main producing countries of the world has begun. Weather change is becoming one of the main factors of market concern. But considering the above factors, the red May market of Zheng cotton futures is difficult to reproduce as long as there is no widespread extreme weather.