Zheng Cotton Main Contract Finally Broke The Gap?

Since April, Zheng cotton's contracts have gone through a difficult round of oscillation and rebound, and the CF2009 contract has hit 12000 yuan / ton strong resistance position for four times, all of which ended in failure, of which 20 days in May, the high spot was 11955 yuan / ton, and it was only a short distance from 12000 yuan / ton.

I believe that in the past month or so, the domestic cotton period is now rising steadily. No matter from the external news, technical aspects or supply and demand fundamentals, the CF2009 contract breaking 12000 yuan / ton pass is the general trend. Despite the occasional wide oscillation, it does not change the trend. Whether Zheng cotton can usher in the reversal depends on the real consumption of cotton in China in 6 and July, the trend of Sino US trade relations and the trend of commodity futures such as crude oil and agricultural products. On the whole, the author holds optimistic views on the trend of Zheng cotton. The reasons are summarized as follows:

First, despite the constant trade friction between China and the United States, the first stage of the trade agreement continues to be effective and effective. The two is the resumption of the economy under the epidemic situation in Europe and the United States. Due to the adoption of more stringent control measures, the probability of the two outbreak has dropped markedly. Trade, transportation, retail and other industries are recovering orderly. Three, since mid April, China's textile and clothing demand has rebounded. Foreign trade orders are also partly reflux (mainly autumn and winter textiles and clothing). Production enterprises and foreign trade companies have passed the darkest and most difficult times, and confidence has gradually resumed. Four, monetary policy will continue to be relaxed, and there is still much room for lowering interest rates. The downward trend of LPR will not change. Five, since late April, some parts of Akesu, Kashi and other parts of Southern Xinjiang will continue to have low temperature and precipitation. Sand dust weather is not conducive to the growth of cotton seedlings, and may affect cotton production in Xinjiang in 2020/21.