Zheng Cotton Trend Analysis: Is There Any Limit Behind The Limit?

First, disk trend

On Monday, precious metals such as gold in the bulk market had gone up, breaking 7 offshore, which is a good thing for exports. Most of the other varieties started to fall sharply. Reasons for Japan and South Korea trade friction upgrade, the United States 300 billion landing, market funds hedge. Zhengmian down, closed 12225, since the beginning of June last year showed a smooth downward trend, mainly two callbacks, one was 7-8 months last year to rush to grab foreign trade orders, one wave is this year after the Spring Festival trade and trade negotiations.

The rate of pullback did not break through the previous high point, and the price was difficult to sustain. Because the whole international market environment is oversupply, which is also the reason for putting the US cotton weekly chart. Other domestic Zhengzhou cotton market has seen a sharp increase in positions due to the top 20 Futures Company from the market, but almost all come in short and empty. Is there any limit after that? It seems very possible to me.

Two, supply side price performance

Xinjiang cotton picking price, COT A, CCindex 3128B: from domestic and foreign Xinjiang three price index, saw a major decline, mainly because the United States more than 300 billion plus 10% tariffs, the news on Monday has been fully reflected in the disk. Last week, the average picking price of pick-up cotton for nearly 7 days was 13828.57 yuan / ton, and the average delivery price of nearly 30 days was 13946.67 yuan / ton, at present 13500 yuan / ton, the average price of Zhou Yue fell by -118.10 yuan / ton, the biggest one was the weekly price -328.57 yuan / ton; the average price of CCindex 3128B nearly 7 days was 13997.57 yuan / ton, the average price of nearly 30 days was 14083.53 yuan / ton, at present 13663 yuan / ton, and the average price of the -85.96 dropped by -85.96 yuan / ton.

Almost every month, prices have been cut down with futures almost every month, of which about 330 have fallen yesterday. So what is the international market situation? CotlookA to Hong Kong (1% tariff) discount RMB, nearly 7 days average price 12715.06 yuan / ton, nearly 30 days average price 12848.04 yuan / ton, at present 12411 yuan / ton, Zhou Yue average price fell -132.98 yuan / ton; last week's price has just partially stabilized trend, suddenly in the day of Monday to reduce the quotation, it can be said that the macro completely dominate the spot price trend, is expected to remain empty next week.

Blue business inventory, orange industry inventory, trend line is significantly higher. As of July 31, 2019, cotton business inventories in China were 4 million 873 thousand and 700 tons, down 2.2% in the annulus ratio, an increase of 160.6% over the same period last year. The stock of cotton industry is at 593 thousand and 400 tons, up by 3.7%, down 46.05% from the same period last year. The highest point of commercial inventory was more than 4 million 950 thousand tons in December last year, plus 900 thousand tons of industrial stocks, totaling 5 million 850 thousand tons.

7 industrial and commercial inventories totaled 4 million 873 thousand and 700 tons and digested about 1000000 tons in 8 months? Business inventories are difficult to digest, reflecting the sharp decline in demand and shrinking demand. From the perspective of relative excess and absolute surplus, the market is a market without demand at present. If the new flower is superimposed this year, the market price of the market will be under great pressure.

Three, demand side price performance

At present, the price of polyester staple is 7300 yuan / ton, and the price difference of cotton polyester and cotton sticky is 6363 (last week: 6661.86) yuan / ton, 2063 (last week: 2397.57) yuan / ton. The former spreads narrowed by -298.86 yuan / ton, and the latter spreads by -334.57 yuan / ton.

From the trend of graphics, we can see that the price difference between yellow cotton and polyester is narrowed, and the price difference of blue cotton is narrower. As of August 7th, the price of domestic C32S was 20800 yuan / ton, showing a certain resilience. India C32S current price 21660 yuan / ton, Vietnam C32S current price (jet) 21120 yuan / ton, nearly 30 days average price respectively drops -58.57 yuan / ton, -37.00 yuan / ton, -112.50 yuan / ton. What can we see from the decline of the downstream products? It is obvious that yarn has fallen at this price level.

Four, disk price performance

As of August 6th, cotton futures are now at a base of 1058, 09 of spot premium 09, and 9-1 of disk spreads 616. There is not much change in the spread. The spread of the price spreads more than 400 levels. If the spot price did not go down yesterday, the base level would reach 1428. This is the opportunity for the base repair, and there is only one day in the operation. If we take a closer look at yesterday's industry positions, we can find that on Monday, the industry is involved in nearly 4200 hands, and the second day seems to be a profit margin of about 1800. Based on macro influence and shrinking, price strengthening still has a long way to go.

Five, warehouse receipt situation

The number of warehouse receipts as of August 6th was 13193, and 1292 effective forecasts were accumulated from warehouse receipts. The cumulative volume of the warehouse receipts was 57.94 tons. That is to say, 50 thousand tons of warehouse receipts were digested in July, and we consumed 8 million 500 thousand tons per year, averaging 700 thousand tons per month, and warehouse receipts accounted for only 7% of them. In the new year, it is estimated that by September 1st, the new year will become warmer and warmer, and the market demand will rebound. The US cotton main force will be stable near 60 cents, and the domestic futures price will have a strong support at the bottom of 12000. Under the macro stability situation, the purchase situation of Xinjiang seed cotton Kai balance and the 18600 target price subsidy are mainly concerned.

If the macro deteriorates and the demand for industry is poor, look down to the 10000 support line. Short term price trend still has a great probability to continue downward. It is recommended that wait-and-see be the main factor. 1909 short-term recommendations should be dealt with concussion, short-term rebound, high dumping and low absorption, 12000-13500 interval, 12000 near, 13500 empty.