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The Medium And Long Term Trend Of Cotton Is Still Relatively Optimistic.

2019/4/26 10:53:00 9924

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According to the announcement of the State Grain and material reserve bureau and the Ministry of finance of People's Republic of China, the reserve cotton rotation will be arranged from May 5, 2019 to September 30th. The total amount will be arranged at about 1 million tons, and 10 thousand tons per day will be sold on the left and right side of the market on April 24th, according to the announcement of the State Grain and material reserve bureau and the Ministry of finance of the people's Republic of China in May 5, 2019.

Compared with previous years, there is a total amount of restrictions on the sale of reserve cotton this year. The number of single day listing is obviously lower than that in the past two years.

Table 1: Statistics on the situation of stored cotton rotation

Data source: public data sorting

After the introduction of the reserve cotton rotation policy, the futures market had a great impact on the futures market. The news fell rapidly from 78.28 cents / pound to 77.26 cents / pound.

In fact, the market has long guessed the policy of reserve cotton rotation, and the timing of the rotation is also expected. However, the market has not shown a positive reaction to the negative result, but has resulted in a short downward trend. The main reason is that the selling of cotton reserves has occupied the current market for the consumption of inventory, because the recent low quality cotton output is more smooth, and the market demand for low quality and low price cotton is considerable. The cotton reserves sold this year should also be mainly cotton for 2011-2013 years, with a certain price performance advantage.

After the arrival of the cotton reserve policy, the supply and demand structure of the cotton market has been basically determined this year. If we do not consider the rotation of the reserve cotton and throw the store in accordance with the 100% turnover, the gap between supply and demand will be 326 thousand tons this year, a decrease of 1 million 74 thousand and 100 tons compared with the same period last year. The supply of short-term easing is the main logic of the current market. However, judging from the performance of yesterday's night market, Zheng cotton has been pulling up straight after its low opening, and it has only fallen slightly, showing that the power of buying can not be underestimated.

At present, the contradiction in the cotton market is that the market is short of low quality and low price cotton, and most of the cotton in the northern Xinjiang has existed in the situation of warehouse receipts. The spot price has been pushed up, and the futures price has been rising, leading to a weaker base than the same period in previous years.

Table 2: supply and demand structure of domestic market

Data source: public data sorting

From the perspective of the position structure, the current 05 cotton contracts are held at 150 thousand hands, and 09 contracts are held at 686 thousand positions. The contract position is about 2 times that of the same period last year. On the one hand, it shows 05 contracts have increased willingness to pay, on the other hand, it shows that there are more speculative funds at present.

Look at the delivery situation, as of 24, the number of warehouse receipts was 23147, converted to lint 926 thousand tons, if this year's North Xinjiang output is calculated according to 2 million tons, and does not calculate the new cotton market to the present consumption, half of the output has already generated warehouse receipts, the margin of the warehouse receipts continues to exert pressure is limited.

Table 3: basis condition

Data source: wind, state capital Futures Research Institute.

From the delivery cost to calculate the disk delivery pressure level, the 1905 contract position cost (including delivery fee, pportation fee, delivery fee, warehousing fee, value-added tax and capital interest expense) is 1558 yuan / ton, and the position cost of the 1909 contract is 1905 yuan / ton. The spot cost is calculated according to the northern Xinjiang 14500 and the southern Xinjiang 15500. The 1905 contract delivery pressure level (calculated by the delivery settlement in Xinjiang) is 15308 and 16308 yuan / ton respectively, and the 1909 contract delivery pressure level is 15655 and 1909 yuan / ton respectively. Therefore, the contract will be supported by the spot price, and the pressure on the warehouse receipt will be smaller than that.

Judging from the trend of speculative capital, since the 09 months of the main contract, there has been a large increase in the number of positions, mainly speculative capital. This part of the fund has a great help in helping to fall. Under the current circumstances, it is very likely that profits will be depressed by the bad profits.

The impact of the cotton reserve policy on the cotton futures market will stimulate the speculative capital to lower the disk in the short term, and from the base point of view, there is also a driving force for downward adjustment of futures prices.

The current base is lower than the same period. With the futures delivery approaching, the spot price fluctuation is limited, and there is a larger probability of futures converging to spot, but the space is not large. The estimated period price adjustment space is about 300.

In the medium to long term, with the large number of low rise warehouse receipts registered and deliveries, the cost of warehouse receipts will gradually increase. For industrial customers, the sharp decline in futures prices will be a rare price opportunity.

Considering that it is difficult to guarantee the 100% turnover of cotton reserves, and there is a round of expectations, the supply and demand situation of the cotton market is not loose this year. The current international cotton price is rising, the new year's output is uncertain, and the probability of the weather speculation is still large. Therefore, the pen thinks that the long-term trend of cotton is relatively optimistic.