Macroeconomic Incentives To Stimulate Domestic Cotton Prices Are Limited.

Last Friday, the office of the Customs Tariff Commission of the State Council of China announced that, according to domestic needs, Chinese enterprises independently imported a certain quantity of commodities from the United States through market-oriented procurement. At present, some soybean, pork and other commodities are being excluded according to the application of relevant enterprises. Before the news came out, the pessimistic mentality of the United States on tariffs on Chinese goods increased more and more at home and abroad, but after the news was released, the industry again hoped that the Sino US trade agreement would be rekindled in December 15th. Thanks to this good news, domestic and foreign cotton futures prices rebounded significantly. ICE cotton futures jumped more than 2% on Friday, the main contract rose 1.49 cents in March, and the settlement price was 66 cents per pound. Zheng cotton main contract CF2005 closed 13270 yuan / ton on the same day, up 270 yuan / ton, or 2.08%.

However, the rising trend of Zheng cotton futures price is not lasting. Today, Zheng cotton has gone down sharply after its high opening. And according to the feedback from the cotton traders to the spot trading on the two weekend of last week, Zheng cotton prices rose, but the spot trading rhythm slowed down. Because the market's agreement on Sino US trade remained at wait-and-see level, the short-term good news stimulus failed to let the industry worry about it. Moreover, most of the stock markets followed the zhengmian price point a few days ago. After the futures price rose, the price performance of the spot price decreased, and the number of enquiry sheets decreased.

As futures prices rebounded slightly, some of the ginning plants and trading enterprises to protect orders, fixed price spot prices did not make substantial adjustments. At present, the price of Xinjiang's machine picked cotton has been raised by 13100-13300 yuan / ton in the 3128 class, and the price of hand picked cotton in Xinjiang has been raised by 13200-13500 yuan / ton. According to statistics, as of December 5th, the total number of processing lint 3 million 788 thousand tons in the country increased by 1.25% compared with the same period last year, and the market supply tended to be loose. On the same day, the number of warehouse receipts for Zheng cotton increased to 20603, an increase of 606, and 4752 effective forecasts were reduced by 253. The total amount of cotton warehouse receipts is 25355, which is equivalent to 1 million 14 thousand and 200 tons of stock. The increase in the number of warehouse receipts in Zhengzhou cotton has made obvious pressure on the upward trend of futures.

Near the end of the year, the news of the Spring Festival holiday in textile enterprises continues to continue. Some enterprises are going to inventory, return the funds, give up the shipping phenomenon, and shift the focus of the cotton yarn prices downward. The downstream grey market also increases the amount of money to go back to stock, and the price of pure cotton cloth has changed steadily. Short term downstream demand has no obvious support for the rise of cotton. Therefore, the news short time stimulation to cotton price upward stimulation is relatively limited, the industry chain upstream and downstream operators will still be cautious, as to whether the price is once again sharply explored, we need to pay attention to the 15 day whether the US side decides to raise tariffs on Chinese products.