Two Sessions To Cotton Market Late Or Insufficient Strength

The schedule for the "two sessions" has been finally released. According to the tenth meeting of the Standing Committee of the Thirteenth National Committee of the Chinese people's Political Consultative Conference held in May 18th, the three session of the thirteen National People's Congress will be held in Beijing in May 22, 2020. The three session of the thirteen session of the CPPCC National Committee was held in Beijing in May 21, 2020. "The hottest two sessions" is coming. Can cotton be "borrowed east wind"?

Generally speaking, every year the two sessions can bring some heavy profits and positive effects. Even if the message points are not specific to the specific product industry, only the market risk preference warming up and the possibility of good expectation are all expected to be "hyped up" by investors. In fact, the initial schedule of the 2020 national two sessions was scheduled to be held in March 3, 2020 (the third session of the Thirteenth National People's Congress of People's Republic of China) and the third session of the Thirteenth National Committee of the Chinese people's Political Consultative Conference (March 5th). However, with the outbreak and rapid spread of the epidemic, the sixteenth session of the Standing Committee of the thirteen National People's Congress in February 24th. In the afternoon, the decision to postpone the two sessions was passed, and the specific time will be notified separately. After entering March, the domestic epidemic situation was basically controlled and the national resumption of production resumed. The normal economic order in China gradually recovered. At the same time, the work of preventing and controlling the epidemic was resumed. At the same time, the focus of the national work was gradually focused on ensuring the smooth operation of the economy and society. Therefore, this year's "two sessions" effect has come a little later, and the response of the cotton market is not yet obvious.

The meeting time and related cotton prices in the two sessions of the calendar year

Source: lung Chung

By analyzing the performance of Zhengzheng cotton at the time of the NPC and CPPCC meetings in China (see table above), the conclusion is:

First, in the past ten years, the duration of the two sessions in China has basically been fixed in March 3rd and March 5th each year. It is understood that since 1998, the two sessions of our country have been relatively fixed. The meeting lasted about two weeks, and generally controlled for about 10-12 days.

Second, in the past ten years, the probability of Zheng cotton rising before the two sessions was significantly higher than the probability of falling. During the two sessions and the end of the week, Zheng cotton's performance was not outstanding. The probability of Zheng Cotton falling was higher than the rising probability during the holding period.

Third, cotton prices are weak and sensitive to the hot spots of the two sessions. The stimulating effect of the two sessions on cotton prices is not absolute.

To speak plainly, cotton prices will not be "promising" under the "big boss" benefits of the two sessions. Before the two sessions, the warming of market risk preference has played a certain role in supporting or stimulating cotton prices. Cotton prices are expected to show a strong upward trend when there is no sudden bad news in cotton market. However, once the two sessions are held to mean good digestion, the trend of cotton prices will return to the market supply and demand guidance track. In addition, according to the survey of the industrial and non industrial customers, the market participants are not very concerned about the two sessions. Cotton, as a special agricultural product in the textile industry chain, has basically come down to the policy of planting, subsidization, import and finance during the two sessions.