The Main Contract "Increased Volatility", Zheng Cotton Suspected To Enter The "Rainy Season".

In recent days, Zheng cotton main CF09 contracts have risen and fallen, and the fluctuation has increased. The upstream suppliers and downstream textile mills have different interpretations of the market rumors. The different outlook for the future market has caused the fluctuation of the market. Here, I have some experience to share with you:

(1) rumours of dumping: Although there is no official news at present, it is not "groundless". The national team's tactics of "purchasing, storing, throwing and storing" have been very mature, and imported cotton as the new force of reserve is playing an increasingly important role.

(2) tight storage capacity: According to the "China Cotton Information Network" and "cotton outlook", the Port imported cotton bonded warehouses are experiencing "tight storage capacity". It seems that they are about to "expand the storehouse". A large number of warehouses in Xinjiang also move to the warehouse in the mainland, resulting in "tight storage capacity". The new cotton is transferred to the mainland, so as to free up the storage capacity to store 2020/2021's new year's cotton. Moreover, the warehouse warehouse of the inland delivery warehouse is more easily favored by the mainland textile mills.

(3) the new cotton has entered the flowering period this year: April seedlings, May buds, June flowers, July bell. The situation in the main cotton producing areas this year is very good. If there is no accident, it will be a "bumper harvest year". Enter July, there may be another "hail" (the overall impact on cotton is very small), if the dealer speculation "weather factors", then suggest you hurry "empty" into.

There is also a message to share with you: it is rumoured that this year approved the establishment of forty cotton processing lines in North Xinjiang (cotton machine factory sold forty new production lines), the cost of contracting up to 350 years, the entire market "steaming hot", cotton processing capacity has expanded a lot, until the new cotton market in September this year, it is very likely that the phenomenon of "grab seed cotton" will happen again. Prepare for this. Upstream cotton seeds, no orders downstream. This is the case now.

(4) USDA is expected to lower global cotton consumption: Under the influence of the global epidemic, the recovery of downstream consumer market takes a long time. All in all: because a "epidemic" causes global cotton consumption to shrink, this is not the case in one or two days. In the second half of 2020, if there is another second wave of disease, it is likely that the consumption of textile and clothing will be "extremely atrophied". With the uncertainty of Sino US trade disputes and the outbreak of the global epidemic, the market outlook for commodities has been overshadowed. Uncertainty increased. It is estimated that the price fluctuation will increase in the future.

In recent days, Shanghai has entered the "plum rain season". The "characteristic" of the rainy season is "continuous rain". Occasionally, there will be sunshine. The price of bulk commodities, especially cotton, appears to be "overcast" and may be the main theme of the future. The current CF main contract price of around 12000 should be the price that we can accept in the near future. There are too many cotton in the market. Downstream cotton mills do not accept "high priced cotton", because cotton is high and textile mills simply can not get orders. The state has subsidies, even if cotton prices are lower, cotton farmers' income is also guaranteed, and textile mills can receive orders. Hello, everyone is really good.

Return to the rule of the market itself: "the bull market ends with the supply, the bear market ends and the consumption". Nothing can be done without spending. It is hoped that the rainy season will soon pass and usher in a sunny day.