After The Return Of Funds, Zheng Cotton Oversold Rebound

The first part is the summary of basic data of domestic and foreign cotton market.

First, weekly data overview

Prices of major commodities and cotton

　　 This week, the CRB commodity price index increased by 7.12 compared with May 1st. In May, the 8 daily newspaper closed 124.75 cents / lb, breaking the pre pressure level 120 integer mark, of which the crude oil performance was stronger, the oil price continued to rise, this week rose 3.71 US dollars / barrel. In May 8, the US crude oil 07 contract received 26.04 U.S. dollars / barrel, and is currently under the 26 dollar / barrel pressure level. Agricultural products rose slightly in May 1st compared with that in May 1st. Soybean and corn increased considerably. ICE cotton contract 07 edged up 0.44 cents / pound compared with May 1st. The mainstream cotton resources are mixed with each other in May 1st, and the domestic cotton yarn price index has maintained a downward trend for 9 consecutive weeks, and this week dropped 110 yuan / ton.

On the spot side, as of May 6th, Xinjiang processed 5 million 166 thousand and 800 tons and accumulated a total of 5 million 99 thousand and 500 tons of public inspection. The spot price was basically flat with last week, with a slight decrease of 38 yuan / ton. On the first trading day after Wednesday's holiday, Zheng cotton skips the air, and the spot trading volume is larger on that day. After the uplink of Zheng cotton, there was an increase in the number of purchases in the form of base, and more feedback was made for traders to purchase, and spot price procurement decreased.

Downstream market, the current downstream cotton yarn ends are stable before the holiday, and there are still no single orders outside the downstream. The scattered orders can not solve the pressure of high inventory of downstream enterprises, and the downstream is still the state of finished product storage. At the same time, due to cash flow constraints, the raw materials for raw materials in the lower reaches are just needed.

Zhengzhou cotton market, Zhengzhou cotton main force 09 contract during the week, the cumulative price rose 5 yuan / ton, holdings increased 46 thousand to 405 thousand hands, turnover increased 355 thousand hands, to 519 thousand hands, after the Zhengzheng cotton volatility increased, attracting a lot of bottom money admission, active trading.

The second part is the basic situation of the domestic market.

1, textile main raw material trend

　　 In terms of raw material prices, dacron price rebounded less than that of April 30th, viscose prices fell slightly, cotton yarn prices continued to fall, cotton spot price index remained unchanged, Zheng cotton 09 contract slightly increased by 5 yuan / ton compared with April 30th.

2, cotton yarn price trend

　　 In May 8th, the market price of pure cotton yarn and man cotton yarn continued to decline compared with that of April 30th, and the price of polyester yarn remained stable.

　　 In May 8th, the price of imported yarn was lower than that of April 30th.

　　 In May 8th, the price of foreign yarn denominated in Renminbi declined collectively compared with April 30th, and the price of raw materials continued to decline due to weak demand.

　　 The price difference in May 8th was -1091 yuan / ton, and the spread price difference in April 30th was -1196 yuan / ton, and the price difference narrowed slightly.

3. Comparison between domestic cotton futures price and international cotton price index (including tax).

　　 In May 8th, the domestic cotton spot price index CCI3128 reported 11463 yuan / ton; FC IndexM reported 68.26 cents / pound, under the tariff of 1%, the price was 11864 yuan / ton, and the discount tax was 13677 yuan / ton, which was slightly lower than that in April 30th. The spot price index and the cotton price ratio under sliding tax are -2214 yuan / ton, and -2201 yuan / ton in April 30th. Compared with the 1% tariff, the price is -401 yuan / ton. The spot price index and the sliding price difference widened slightly.

In May 8th, the main contract 2009 closed at 11655 yuan / ton, and the price difference between FC Index M (sliding tax) was -2022 yuan / ton, in April 30th it was -2052 yuan / ton, and its FC Index M price difference was 1% yuan / ton under the tariff. The price difference between Zheng cotton and sliding tax has narrowed.

　　 As of May 8th, the main contract of ICE was closed at 55.3 cents / pound in July, 8647 yuan / ton on the disk price, and 3007 yuan / ton in the 2009 contract with zhengmian 2009. The trade price of 10 cents was calculated to be RMB 11441 yuan / ton, and the price difference between Zheng cotton 2009 contract (zhengmian -ICE cotton) 213 yuan / ton.

The third part is Zheng cotton market analysis.

1, Zheng cotton warehouse receipt and effective forecast situation

　　 As of May 8th, Zheng cotton registered warehouse receipt was 27718 (1 million 191 thousand tons), effective forecast of 3563 (153 thousand tons), warehouse receipts and effective forecast total 1 million 344 thousand tons, 1 million 365 thousand tons in April 24th reduced 21 thousand tons, total warehouse receipts continued to decrease, the disk pressure has been released.

2, Zheng cotton current price difference analysis

　　 As of May 8th, the difference between Zheng cotton futures price and CCI3128B index was 192 yuan / ton, and 149 yuan / ton in April 30th.

3, Zheng cotton price analysis

On the macro level, as of May 9th, there were more than 4 million confirmed cases of new crown pneumonia in the world, with more than 270 thousand deaths. Germany's export volume fell by 11.8% in March, the biggest decline since August 1990. Italy's GDP fell by 4.7% in the first quarter, and 12.4% in imports. In April, the United States reduced 20 million 500 thousand jobs in terms of non-agricultural employment, the unemployment rate soared to 14.7%, the number of non-agricultural employment decreased and the unemployment rate soared, which easily broke the record after World War II, and also reflected the great economic losses caused by the fight against virus. At present, the global epidemic trend has eased, and the focus of the market has gradually shifted to the resumption of work in various countries after the outbreak. At present, Kazakhstan, Uzbekistan, Kyrgyzstan, Georgia, Azerbaijan, Armenia, Tunisia and other Asian European and Middle East countries are gradually relaxing control and isolation measures. The overall epidemic in the United States has entered the platform since April, and Trump began to actively promote the resumption of work. Trump announced the resumption of work guidelines, 46 states have issued a resumption plan. In order to restore the economy after the outbreak, the US Congress has issued three stages of fiscal stimulus. In March 6, 2020, it signed the coronavirus preparation and response supplementary appropriation Act (stage 1), which allocated US $8 billion 300 million for the public health expenditure in the United States. In March 10, 2020, the president signed the family coronavirus Response Act (second stage); 2020 3. On July 27, the president signed the coronavirus assistance, relief and economic security (CARES) Act (third stage), providing a $2 trillion and 200 billion rescue plan, accounting for 10% of GDP in the United States. The recipients of the bill include individuals, small businesses and large and medium-sized enterprises, which are conducive to stabilizing the cash flow of enterprises during the epidemic. In Europe, the epidemic has entered a plateau in some countries due to epidemic prevention measures. Many countries, such as Italy, Germany, Switzerland and Portugal, are gradually recovering their economic activities to revive the economy. These regions are China's major exporters of textile and clothing, which exceed half of the total export volume. According to the promenade of the development track of China's epidemic situation, the demand for textiles and clothing will improve after the resumption of the resumption of production. Compared with the domestic segregation period, the signing of the US cotton contract is strong in recent weeks. The signing of the situation in South Asian and Southeast Asian countries is beginning to pick up. The average volume of land cotton transportation this week is more than that of the previous week and nearly four weeks. Begin to recover. The major textile powers in the world are Bangladesh, Vietnam, China and Pakistan. Among these big textile powers, China has the best control of epidemic situation, and the economic activities have basically recovered to the epidemic situation. If demand is warmer, China's export orders will probably increase, which is undoubtedly good for the upstream and downstream enterprises of cotton flower. We need to pay close attention to the actual situation of new orders from downstream export enterprises.

In addition to the risk factors for the continuous fermentation of the epidemic, there are two points in the current market. One is the January 29th US President Donald Trump signed the revised US Mexico agreement. The new agreement, referred to as USMCA, will take effect in July 1st. It is worth noting that, in article 32.10, this clause clearly sets out the goal of the Trump Administration for future agreements, that is, countries should make a choice: whether they sign free trade agreements with the United States or with non market economies such as China. The US Mexico agreement strengthens the discriminatory restraint on non market economy countries, restrains China's textile export trade and the global value chain division of labor. Second, as we all know, after the outbreak of the outbreak, the Fed immediately adopted an unlimited amount of loose monetary policy, which reduced the Fed's benchmark interest rate to zero in a short time, and raised the balance sheet of the Federal Reserve to $6 trillion and 400 billion. The assets of the Fed increased by more than two billion US dollars in the short term. That is to say, in order to save the economy, the Fed injected a lot of liquidity into the market in the short term. In this case, the dollar should depreciate, but the fact is that the dollar has not been devalued, but has been in a strong position. It can be seen that after the outbreak of the new crown pneumonia outbreak, the global economy is in great difficulty. The risk of the global financial market is getting higher and higher. Global investors may rush to the US dollar and the US Treasury bonds in order to minimize their risk of holding assets, leading to the overall decline of other asset prices. This may be a new warning of the coming global financial storm.

Judging from the global cotton pattern, according to ICAC, the world's cotton output in is 25 million tons, 4% less than this year. Consumption is 23 million 200 thousand tons. As the global economy shrinks, the level of inventory is expected to increase as production exceeds consumption, and again pressure on prices.

The pattern of oversupply of cotton in China has become an indisputable fact. At this stage, we will focus on the weather factors and the change of downstream demand in cotton growing process. Recently, due to the strong cold air intrusion in Xinjiang's cotton region, there was strong wind and dust storms in the southern Akesu basin. The market was worried that bad weather would have an adverse effect on the growing seedlings. Zheng cotton rebounded low, and the price rose sharply by 205 points. But through actual investigation, we know that due to the early spring plowing and spring sowing work, there has been no phenomenon that the plastic film has been blown up by strong winds. The adverse effects of weather on cotton are limited, but during the cotton growing season, the weather will become the main factor to promote cotton prices. Secondly, we need to pay attention to the change of downstream demand. According to the ITMF, compared with the same period last year, the proportion of global textile orders cancelled or postponed from 8% to 40%. In 2020, the global textile industry expected to expand its turnover from 10% to 33%. Domestic, cotton textile market this week and little change before the start of textile enterprises gradually restored to the pre holiday level, pure cotton yarn market continued to slant, the overall inventory level of textile enterprises is still rising, the first trading day after the holiday, cotton prices skim down, the day spot trading volume is bigger, spinning enterprises low replenishment mentality is obvious, also reflects the pessimism expectations for the future has improved.

This week, the CRB international commodity price index closed 124.75 cents / pound in May's 8 daily report, breaking the pre pressure level of 120 integer mark, and recently concerned about the pressure near 130. Domestic Chinese goods finished 135.09 in May 8th, up 1.81 from April 30th, and 136 above the short-term pressure. Judging from the trend of domestic and international commodity index, the price fell sharply after a sharp fall, and the bottom trend of individual commodities appeared. Especially from the trend of US cotton, the current 07 main contract dropped to 48.15 cents / pound, and the focus of the price shock moved upward, recovering the important integer pass 52 cents / pound. The Zheng cotton 09 contract in China is stronger after the festival. Because of the bad weather in Xinjiang's cotton area and the strong export data of the US cotton market and the optimistic anticipation of the market's demand for the future, the fund is pouring into the market.

On the whole, the pattern of Zheng cotton is relatively contradictory in recent years. There are still risk factors in the market. The current epidemic situation seems to have eased, but the impact of the epidemic is persistent, and we should not underestimate its seriousness. Since the outbreak of the new crown pneumonia outbreak, Italy, France, Spain, the United Kingdom, Germany and other major European Union countries have been hit hard, and the impact from supply, demand and supply chain has dragged down economic growth and has a huge negative impact on the financial system. Secondly, the trade agreement between Mexico and Canada may not be conducive to the healthy development of Sino US trade. But in the long run, cotton prices are at a low level in history, and the market has a low willingness to sell short; secondly, in order to stimulate the economy, countries adopt loose monetary policy and fiscal policy, which will play a role of underpinning asset prices. On the other hand, the growth trend of the global epidemic is eased and consumption will eventually pick up. In the long run, the cotton price center will gradually move upward, and the recommended long position of the bottom line is controlled at 10-15%.

　　 This week, the 09 main contract of zhengmian main force was affected by factors such as weather and external disk, and the price rebounded at a low price. The price of the week was up to the top of the middle track, and the upper orbit was pressed by the upper rail pressure. At the end of Friday, it closed at 11655 yuan / ton, focusing on the 11700 yuan / ton pressure level before. The MACD index fitted the golden fork and spread upward, and the red column volume showed that the popularity of the bull population was strong. The KD index alloy fork had the trend of upward divergence. From the Bulin channel, it is now in the closing stage, and it is expected that the short-term wide oscillation may be too large, and the recent attention will be changed.

The fourth part is international market analysis.

1, US cotton export dynamics

　　 04.23-04.30 this week, 2019/20 cotton sales signed 83979 tons in the year, 15% less than that of the previous week, but the average contract volume increased significantly over the past four weeks. The shipment of 83987 tons of upland cotton increased by 46% compared with the previous week, and the average carrying capacity increased by 12% compared with that of the previous four weeks.

　　 As of April 28th, CFTC holdings data showed that the fund's net multi position was -11485, after a week's data was -14198 hand, the fund's net long positions increased slightly, an increase of 2713 compared with last week, this week's fund net long position has maintained 4 consecutive weeks of rising trend, indicating that the market pessimism has improved.

2, ICE cotton analysis

　　 ? ? This week, the ICE cotton main 07 contract, the performance is first suppressed after Yang, after two consecutive days of middle Yin fall, by the future expected to turn better, the late price of three consecutive Yang upwards, back to make up the drop space, the weekly price rose slightly 0.44 cents / pound, MACD index fitting is golden fork upward divergence is expected to break the 0 axis, red column volume, shows the popularity of many people, KD index has the trend of fitting to form golden fork. The indicators are strong and focus on the recent changes in warehouse volume.

The fifth part is operation suggestion.

In the first week after the holiday, Zheng cotton first suppressed and then raised. Under the stimulation of market favorable news, cotton price rebounded and the price trend broke down, but the pressure remained above, and the probability of short-term broad shocks was expected to be too large.

It is suggested that the upstream cotton enterprises should continue to do well in inventory risk management, keep the value of sales according to the progress of sales, and sell the unsold resources of cotton enterprises to wait for the sale of Zheng cotton to the higher spot price, and also sell the call option with high exercise price, and make up for the loss of spot positions in a small amount.

It is recommended that cotton trade enterprises set up virtual stocks near the low price area of history.

Textile enterprises already have (virtual stock) positions can be left on the right amount, at the same time, according to the order situation, just need to replenishment.

The base trading company is going to strengthen its base and speed up the sale of spot prices.

It is suggested that the long term bottom line funds that have already been admitted in the early stage will be controlled at 10-15%, and those who have not entered the market will be in the low price area, and the positions will be controlled within 10%.