Why Did The Zheng Da Cotton Not Move?

Later on Thursday, the State Grain and material reserve bureau and the Ministry of Finance jointly issued a notice to reserve cotton wheels for the domestic cotton price. However, judging from the disk, the night market opened slightly higher after the oscillation dropped, the day is even further down. On Wednesday, rumors began to flow out on the market. On the same day, Zheng cotton's weakness in the five consecutive transactions turned higher, and the main 01 contract closed up 255 yuan / ton. After the purchase and storage of more than a few cash, Zheng cotton night plate slightly higher after the oscillation again fell, the day plate narrow fluctuations.

No more need to buy and sell, but less demand.

The Announcement No. third issued jointly by the State Grain and material reserve bureau and the Ministry of Finance on 2019 announced that the new territories cotton will be transferred to about 500 thousand tons in the national statutory working days from December 2, 2019 to March 31, 2020. The price of the bid price will be determined by the market price. At the same time, when the cotton is in storage, the cotton price will be suspended for 3 consecutive working days, exceeding 800 yuan per ton, and the transaction will be restarted when the difference between the inside and outside cotton price drops to 800 yuan / ton.

It is doubtless profitable to turn in 500 thousand tons of domestic cotton to market prices. In the new cotton supply period, the rotation of reserve cotton reduced the free flow of cotton resources in the market, alleviating the pressure of supply of some new cotton stocks. However, there is no obvious fluctuation after the profit has been landed. We believe that this is closely related to the current supply and demand situation. At present, the new cotton concentrates in China, and the old cotton stocks are large and the supply pressure is concentrated. More importantly, with the passing of the peak season of consumption, the downstream consumption is down, and it is difficult to "sustain" cotton prices.

Just past gold nine silver ten, though year-on-year consumption is still poor, but the ring is getting better. This is reflected from the downstream start-up rate and inventory. 8 in the middle of the month, the operating rate of domestic yarn and grey fabric began to rebound. At the same time, yarn inventory decreased by 2.37 and 3.29 days in 9 and October respectively. The inventory of grey fabric decreased by 2.08 and 0.72 days in October and October respectively. Entering the year November, grey fabric consumption showed signs of decline first: operating rate fell and stocks rose. According to data statistics, as of last Friday, the grey load index fell 0.4 percentage points from the end of last month, and the stock index increased by 1.3 days from the end of last month. Last week, yarn consumption also showed signs of decline: the rate of operation began to stabilize slightly, and stocks were no longer down to the ground, showing a steady rise. The decline in downstream consumption has hit most of the reserves.

Sino US trade negotiation is uncertain, market caution.

A week after Chile announced its abandonment of the APEC summit last week, there was frequent news of good progress in Sino US trade negotiations. Up to now, the time of signing the first stage of Sino US trade consultation has not been settled yet, and the optimism of the trade consultation between China and the United States has been hit.

Since March 2018, Sino US trade friction has frequently appeared in people's vision. So far, the United States has imposed tariffs on over $500 billion of Chinese goods, while the Chinese side has imposed tariffs on us products of about $110 billion. The two sides have held thirteen rounds of trade consultation and reached a substantive stage agreement in the thirteenth round of negotiations. We always believe that the two sides will reach an agreement in the end, but before that happens, the process is long, tortuous and even repeated. This has led to domestic and foreign cotton prices or because of changes in trade negotiations between China and the United States, up and down, and increased the magnitude of the fluctuation.

At present, more than a month has passed since the thirteenth round of trade negotiations. The initial time agreed for the signing of the APEC summit in Chile has also changed due to objective reasons. Over the past half a month, news about Sino US trade has been continuously profitable. On the one hand, the market has already digested the thirteenth rounds of trade consultation between China and the United States. On the other hand, the phased agreement has not yet been signed and the market sentiment has changed from optimism to prudence.

The purchase of seed cotton is coming to an end and prices are stable.

According to the China Cotton Association data, as of November 9th, the Xinjiang cotton picking rate was 93.93%, and the sales progress was 91.15%. According to this calculation, Xinjiang cotton sales volume in Xinjiang has exceeded 80% of the output. Among them, the northern Xinjiang picking ended, and the southern Xinjiang also entered the closing stage. With the end of picking and selling peak period, the quality of cotton decreased, and some cotton ginning factories lowered the price of seed cotton. Meanwhile, due to the cold wave in Xinjiang, some of the ginning plants have been shut down, and the progress of the sale has also been affected. As of November 14th, 2 million 490 thousand tons of new cotton were processed in the whole country, a decrease of 1.47% compared with the same period last year. Xinjiang has processed 2 million 447 thousand tons of new cotton, 1.11% less than the same period last year. A total of 1 million 947 thousand tons were detected in the whole country, of which the inspection volume in Xinjiang was 1 million 908 thousand tons.

After the national day, due to the increase in the main body of purchase and the speculation in the production of Xinjiang cotton, the price of seed cotton purchase is rising obviously. At the same time, the rebound of Zheng cotton to a certain extent also aggravated the pace of seed cotton purchase price rise, and some areas even appeared the phenomenon of rush to collect. In the middle of November, the sale of Xinjiang cotton began to slow down. With the end of the peak selling period, the price of seed cotton was stable or even down. Last Friday, the purchase price of 40 linen and 10% water seed cotton in Xinjiang Bachu area was 3.2 - 3.3 yuan / Jin, which remained stable since the middle of this month. The purchase price of cotton picking 40 in Kuche was 2.75 yuan / Jin, and 0.05 yuan / kg in the weekly link. The price of three new cotton and wool belt in Akesu was 13500 yuan / ton, which was stable since mid - month.

Seed cotton purchase prices start stagflation

At present, downstream demand is still the theme of market concern. In October, when domestic cotton prices rose significantly, cotton yarn prices remained basically stable. This month, the price of cotton yarn increased slightly. At the same time, the price of grey fabrics fell slightly. It is reported that the current downstream spring orders have started, compared with the same quarter year-on-year decline. Coupled with the uncertainty of Sino US trade negotiations (at present, the progress is smooth, but still can not be conclusive), the market is more cautious is taken for granted. The surplus of cotton reserves has been diluted by worries about downstream consumption.