Sino US Trade Negotiations Favorable Zheng Cotton Futures Small Cotton Yarn Hot Spot Cold Spot Light

Last week (December 9-13), the Sino US trade negotiations came out positive, so that Zhengzheng cotton futures saw a glimmer of hope, and the price rose slightly. At present, textile orders have not started yet, and sales of cotton yarn are still slack. As the Spring Festival is drawing near, it is becoming increasingly urgent for the cotton mill to withdraw money from stock. Although the price of cotton has risen slightly and the yarn price has not been up, some varieties still have a slight drop. Cotton procurement is still dominated by rigid demand, and spinning enterprises do not intend to increase inventories. The sellers are reluctant to sell and the buyers wait and see. The enthusiasm of traders to participate in the decline is expected when the price of cotton rises. Cotton substitute polyester fiber rose under the promotion of raw oil, viscose continued downtrend, breaking 10000 yuan / ton pass a new low. Cotton price CNCottonB index price 13289 yuan / ton, week rise 176 yuan / ton, compared with Zheng cotton futures CF2001 contract, spot premium 434 yuan / ton, week expansion 106 yuan / ton.

Futures. Under the combined effect of the continued downturn in consumption and favorable negotiations, Zheng cotton smoothly consolidated and shifted its focus upward. Last month, the contract CF2001 closed at 12855 yuan / ton, and the week rose 70 yuan / ton. In January, it was close to delivery, and the fund continued to withdraw from part of the shift. In May, the trading volume decreased, and the position quickly dropped. The main contract CF2005 closed at 13370 yuan / ton last Friday, the week rose 100 yuan / ton, capital continued inflow, active trading, position increased significantly. With the rise of the disk and the increase of trading and hedging, registered warehouse receipts continued to increase. Spot sales are slow, and the profit from selling water warehouse receipts is better than cash is the main reason why companies actively register warehouse receipts. Futures prices rose sharply, and the volume of round in transactions decreased significantly, which increased the futures pressure to a certain extent. The price trend still needs to be concerned about consumption. The leading factor is the result of Sino US negotiations. Before the trade war is clear, it is difficult to have the trend market, and the oscillation consolidation is the general trend.

Us disk: Last Thursday, the first phase of the agreement between China and the US reached a big increase on the basis of good news. On Friday, the momentum of inertia rose slightly. The main contract closed at 66.71 cents / pound last Friday, rising 76 points on Friday. This week, if the Sino US talks are no longer clear, the probability of returning to the zone will be greater. Continue to track the progress of trade negotiations.

On the spot. Near the Spring Festival, the pressure of returning stock to stock in cotton mill is larger, orders are still light, consumption remains low, procurement is cautious, rigid demand is the main, continuation of bargain price mode, and cotton maintains lower inventory. The main warehouses in the mainland are loaded with scarce vehicles and light trading. Cotton yarn sales are slow, inventory is relatively high, profit margins are thin. The main body of spot trading in cotton mill is still concentrated in the resources of the mainland. The registered resources and registered prices are mainly sold to traders or participants. The price of the hand picked cotton in the territory is 13000-13400 yuan / ton, the length of the inland Treasury is 28, and the strength is 27 or less, the resource price is 13200-13300 yuan / ton. Fixed price and spot price resources coexist, and sales situation rises and falls with futures. Customs clearance India cotton 13000-13500 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. The selling rate is over 96%, and the processing rate is about 82%. Because of the decline in seed cotton quality, prices have dropped steadily, and cottonseed prices have risen slightly, about 1.95 yuan per kilogram. Spot sales progress is slow, sales rate of around 25%. Due to the low initial purchase price and the good profit from the acquisition and sale last year, the futures premium was maintained for a long time, and the proportion of registered warehouse receipts sold was high. As of December 13th, 923 enterprises in the country declared 3 million 700 thousand tons of public inspection and increased 360 thousand tons per week.

Operation suggestion. Consumption is still the driving force to determine the upward trend of the market. Sino US negotiation is the first factor affecting demand, tracking the signing of the first stage of the agreement, and beware of falling in the boom.