Market Analysis: Short-Term Multiple Factors Restrict Each Other, And The Cotton Price Market Still Maintains A Volatile Pattern

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Zheng Mian's main contract continued to fluctuate on Friday, closing at 15685 yuan/ton. ICE cotton fell slightly overnight as the oil price retreated over the support from the strong weekly export sales report. The stop of reserve cotton sales once led Zheng Mian to rebound, but the pressure on cotton fundamentals remained. In the short term, various factors restrict each other. Cotton prices may maintain a volatile pattern, and continue to pay attention to changes in supply and demand.

Zhongtai Futures said that the periodic fundamentals were still empty. The data from China Cotton Information Network showed that by the end of October, the domestic cotton commercial inventory had increased by 1.0906 million tons month on month to 2.4052 million tons. At present, nearly 90% of cotton is picked nationwide, which puts great pressure on supply. However, the purchase price of Xinjiang seed cotton is stable and weak. The decline of new cotton costs is superimposed on the decline of import costs. The increase of import profits or even more import supply shocks also put pressure on cotton prices. In the accumulation of downstream textile yarn inventory, the demand for textile exports is poor. In the loss of spinning profits, this contradiction between upstream and downstream demand is still unresolved, and cotton prices are still under pressure. However, the reduction of production and the support of costs restrict the falling space of cotton prices.

As for the evolution of market logic, Xinhu Futures said that at this stage, it is still dominated by interval shocks, with the reality of hedging pressure and weak demand, and low cost and warehouse receipt support. The sales progress of Xinhua is close to 90%, and the processing progress of some ginning plants in northern Xinjiang will enter the final stage. The purchase price of nearly half a month will be converted into lint and the premium and bare basis difference will be removed. There will be some hedging pressure on the benchmark panel or above 16000. The hedging pressure near 16400 is intensive, but at the same time, based on the acquisition cost, it will be inverted on the panel, and 01 contract has many positions. In terms of the current price, Enterprises have limited willingness to deliver, so there is also some support under the board. If there is no too much change in fundamentals, it is difficult to effectively break through the range. However, the short-term downstream feedback has slightly improved, so we need to pay attention to the inventory data of cotton mills and cloth mills this week. To sum up, in the near future, the operation is still dominated by interval shocks.