How Does The Spring Festival Approaching The Cotton Market In The Near Future?

With the Spring Festival approaching, the cotton in all parts of the world has become calm after a slight surge. So, how do we view the cotton market in the near future? What will the future trend be?

The author's opinion: before or after a year ago, the market can still be expected.

The reason for this is that the rise has come to an end a few years ago. The reasons are as follows:

1, the downstream manufacturers have already been on holiday, and the procurement of raw materials has stopped. According to feedback from Shandong, Hebei, Jiangsu, Zhejiang and other places of cotton mills, weaving mills and printing and dyeing mills, this year's holiday is usually between 10-15 January and the latest is not over 19 days. That is to say, some manufacturers have entered the holiday this week. Enterprises that have not yet entered the vacation are doing some sweeping work, such as cleaning up debts, arranging warehouses, paying wages and salaries for workers, and so on. Many enterprises are purchasing raw materials.

Without downstream support, cotton can only rise at an annual rate.

2, the recent "Zheng Gao" oscillation. Since December 30th, Zheng cotton main contract CF2005 broke through 14000 yuan / ton mark to close 14005 yuan / ton, nearly 10 days, Zheng cotton has been around 14000 yuan / ton narrow fluctuations. The characteristics are: the center of gravity moves slightly upward, and the surplus power is insufficient.

As of January 9th, the CF2005 contract closed at 14260 yuan / ton, and the volume of intra day trading increased and its position increased.

Why do we say that the market will be ready in future? There are several reasons for this:

First, the obvious signs of good trade between China and the United States.

Second, the conflict between the United States and Iran is escalated and the Middle East is no longer calm. Recently, crude oil prices fluctuated sharply, and international cotton prices continued to rise sharply. On the 9 day, ICE cotton continued to rise. Data show: March contract 70.69 cents, up 73 points, May contract 71.86 cents, up 76 points, turnover 38867 hands, compared with the previous trading day increased 6248 hands. As of January 8th, the closing position was 235866 hands, a decrease of 739 hands.

Third, China's cotton output continued to decline in 2019. National Bureau of statistics data: in 2019, the total output of cotton in China was 5 million 889 thousand tons, a decrease of 213 thousand tons compared with 2018, a decrease of 3.5%. In addition, 500 thousand tons of high-quality cotton will be put into storage in 2019. The contradiction between market supply and demand will appear after two years.