Sino US Negotiations Are Slower Than Expected, And Domestic And Foreign Futures Decline Adjustment.

Last week (November 18-22), Sino US negotiations progresses slower than market expectations, and market anxiety worsens. Domestic and foreign futures end up consolidation and downward downward and fall below the two and average of 40 and 60 days. Reserve cotton rotation is about to start, the market is expected to increase sentiment, cotton mills, traders actively stocking, suddenly futures fell down, triggering a large number of spot price, a cycle turned to a new high of 62944 hands (bilateral). The sales volume of cotton yarn increased, the inventory was stable, the price of polyester was stable, the viscose continued to fall, and the proportion of cotton used in the cotton mill decreased. The acquisition of seed cotton is coming to an end, and cotton production is less than rumours. Cotton price CNCottonB index price 13006 yuan / ton, week rise 33 yuan / ton, compared with Zheng cotton futures CF2001 contract, spot from the previous week 47 yuan / ton of premium 47 yuan / 271 yuan / ton, week expansion of 318 yuan / ton.

Futures. Zheng cotton's main contract CF2001 closed at 12735 yuan / ton on Friday, and fell 285 yuan / ton weekly. The intraday hit a new low of 12580 yuan / ton in recent January. In January, the delivery opportunities decreased, and funds continued to shift. There is little change in buying insurance packages, and selling insurance covers more than 100 thousand hands. Registered warehouse receipts continued to increase, the total amount reached 14826, an increase of 1977, forecast 5461, an increase of 1465 faster than last week. Difficult spot sales, warehouse receipt registration is a sales channel. Reserve cotton rotation will soon be implemented, phased reduction of effective supply, and the price of purchasing and storing the market will have the bottom effect, which can stabilize market confidence, and this round of falling space should be limited, provided that there is no adverse news in Sino US negotiations.

Us disk: Sino US negotiations progress slower than expected, the market concerns increased, the end of the disk nearly 1 months of consolidation turn down, even fell 4 trading days, rebounded slightly on Friday. In December of last month, the contract closed at 64.85 cents / pound on Friday and fell 186 points in the week. The Sino US negotiations remain the most influential factor in the US market and continue to follow the progress of trade negotiations.

On the spot. The market is generally warmer and the confidence is picking up. Orders for the latter order are also showing signs of improvement. The bullish mood of the market is rising, and traders and cotton mill purchases are becoming more active. When the base point price transaction has been popularized, futures suddenly fell and broke, triggering a large number of spot price transactions, partly through the subsequent purchase plan. Because the quality index of machine picked cotton in Northern Xinjiang is better than that in southern Xinjiang, the acquisition is earlier than the southern Xinjiang, and the cost is lower. The sales are better than that in southern Xinjiang. The main body of spot trading in cotton mill is still concentrated in the 18 years' resources of the inland Treasury, and the main registered warehouse receipts or spot prices are sold to traders. The price quoted in the territory is 13300-13700 yuan / ton, which is close to the 18 years' resources of the inland bank and the freight rate is higher than the mainland price. In the mainland, there is a coexistence of Treasury fixed prices and spot price resources, and sales are up and down with futures. The 3128B Xinjiang hand picked cotton price in the mainland is 13300-13600 yuan / ton, the machine adopts Xinjiang cotton 13300-13600 yuan / ton, customs clearance India cotton 12900-13500 yuan / ton, Australia cotton 15500-16000 yuan / ton, Brazil cotton 13300-14000 yuan / ton, West Africa cotton 12500-13500 yuan / ton.

Acquisition of new cotton. The picking of new cotton has basically come to an end, and sales are coming to an end, processing more than half. The purchase price is relatively stable, and spot sales progress is slower. The pre purchase price is low, the futures premium is maintained for a long time, the proportion of registered warehouse receipts is high, and sales profit is better than that of last year. As of November 22nd, 895 enterprises in the country reported 2 million 460 thousand tons of public inspection, representing less than 80 thousand tons. The quality of public inspection cotton has gradually improved, which is still slightly worse than last year.

Operation suggestion. Reserve cotton rotation is about to start. The proportion of pre insurance coverage is relatively high, and spot sales pressure is relatively relaxed. On the technical 40 and 60 day average line support, the Sino US negotiations will maintain the status quo, the disk will still maintain a range of shocks. We will continue to pay attention to the progress of Sino US negotiations and the increase in orders consumption. (Jiangsu Nongken Cotton Industry Co., Ltd. He Yinguan)