The Target Price Of Xinjiang Cotton Remains Unchanged, And Zheng Cotton Funds Move To The 09 Contract.

[spot overview]

March 26th cotton spot index CCI3128B quoted price to 11323 yuan / ton (+172); current price difference -678 (05 contract closing price spot price), polyester staple price quoted 5650 yuan / ton (-40), viscose staple fiber quoted price 9200 yuan / ton (-100); CY Index C32S quoted price 20260 yuan / ton (-40), FCY Index Index (imported cotton yarn price index) quoted 20647 yuan / ton (()), inside and outside cotton yarn price difference; Zheng cotton warehouse sheet 33403 sheets (-552), effective forecast 4322 (-71); warehouse receipt and effective forecast continued to decline. As of March 26th, Xinjiang accumulated 5 million 68 thousand and 800 tons of processing capacity and 4 million 934 thousand and 700 tons of public inspection. The reserve cotton actually entered 7560 tons yesterday, with a turnover rate of 37.8%, with an average transaction price of 12443 yuan / ton.

[market analysis]

At present, the price of EMOT M in the US is 64.75 cents / pound, the price of India S-6 1-1/8 is 69 cents / pound, and the price of Brazil M to Hong Kong is 65 cents / pound, and the total price of cotton to port has risen sharply by 0.5 cents / pound. Yesterday, the US Senate passed the $2 trillion stimulus plan; G20 will launch a $5 trillion boost to the economic plan; Powell appease the market, believing that the economy will rebound, and the Fed still has room for policy. Under the news of a lot of news, the Dow three days narrowed nearly 4000 points, or up to 21.3%. But at the same time, we need to pay attention to the number of initial jobless claims announced yesterday. As of March 21st, the number of unemployed persons in the early week of March 21st was 3 million 283 thousand. The highest record was 695 thousand in 1982, far exceeding the historical peak, far exceeding the expected value of 1 million people, and the number of unemployed has exploded to a record high. The US economy is mainly driven by consumption. Even the $2 trillion stimulus package will not solve the underlying problem. The epidemic has left people in a state of self isolation. Economic activity has been suspended and the worsening demand has intensified. ICE cotton has fallen again, ending at 52.81 cents / pound, dropping 0.69 cents / pound; the average system continues to be in short order, the MACD green column is shrinking, but it is still in the vulnerable area below the 0 axis, and the technical indicators are in a weak position. The recent price range is 50-56 cents / pound.

Yesterday, the website of the national development and Reform Commission announced that the cotton target subsidy policy of Xinjiang was approved by the State Council. Since 2020, the cotton target price policy has been perfected in Xinjiang. The target price level is 18600 yuan per ton, every three years, and the target price is adjusted according to the assessment results. Generally speaking, the new target subsidy policy has remained unchanged for 2017-2019 years, which is 18600 yuan / ton. A sound target subsidy policy will help improve cotton planting enthusiasm, stabilize cotton planting area and ensure the stability of the supply side. But it is likely to further weaken the fundamentals. As of February, the cotton business inventory in the country was 4 million 972 thousand and 600 tons, which is at a record high. The new crown virus made the demand side that was already in a weak position even worse. The order of spinning and clothing was reduced or even the order was cancelled. Cotton yarn and cotton fabric also appeared to be stored in the warehouse. The epidemic continued to spread, and the consumption of cotton would continue to decrease. The stable supply side would form a certain pressure on cotton prices. Yesterday, Zheng cotton 05 contract, the rising power is insufficient, rushing to return the star. The average line system continues to be in short order, the MACD green column is reduced, but it is still in the vulnerable area below 0 axle, and the technical index is in a weak position. Positions were reduced by 9729 to 314 thousand hands, 09 positions increased by 2701 to 277 thousand, and funds gradually shifted from warehouse to month to 09 contracts. Focus on late warehouse changes, short-term interval 10000-11500; 5-9 price difference -460 yuan / ton.

[operation strategy]

Zhengmian 2005 contract continued to shake weak trend in the near future. It is suggested that the upstream cotton enterprises do well in inventory risk management; the downstream textile enterprises need to replenishment only according to the order; the long line funds can be backed up by the 09 contract historical lows, and the positions will be controlled at 20-30%.