Since September 13, the transaction rate and transaction price of reserve cotton have rebounded significantly. ICE has rebounded in shocks driven by the weather in the main cotton-producing areas of the United States and the excellent signed export data in 2016/17. Zheng Qi took the lead in rebounding strongly, and it only took 8 months. On the trading day, it rose from 13,815 yuan/ton to 15,550 yuan/ton, an increase of 12.56%. The Zheng period, the reserve cotton transaction price, and ICE formed a triangular resonance, which borrowed from each other and restricted each other.
Some institutions and cotton companies believe that the Zhengzhou CF1701 contract will test the 2016 high of 16,185 yuan/ton after breaking through 15,500 yuan/ton. The direction of the entire cotton market will gradually reverse, and the 3128 grade spot price in the new year will approach 16,000 yuan/ton. (Gross weight). The editor believes that cotton prices are still rebounding and do not meet the conditions for reversal. There is not much room for growth. It is difficult to break through 16,000. The reasons are as follows:
1. Downstream markets such as cotton yarn and gray cloth put pressure on the rebound of cotton prices
In late September, the prices of C32S, C40S, and JC40 in the domestic market were 20,500-20,700 yuan/ton, 21,800-2,200 yuan/ton, and 24,700-25,000 yuan/ton respectively, which were 200-300 yuan/ton higher than those reported in mid-September. , the increase was only about 1%, which was significantly lower than the increase in Zhengzhou and cotton spot prices. Moreover, judging from feedback from spinning mills, gauze inventory is still at a relatively high level. On the one hand, textile and clothing exports started ahead of schedule in 2016. The off-season is not weak and the peak season is not strong. Foreign trade companies and clothing companies said that domestic and foreign sales orders in October and November were lower than expected. On the other hand, low-priced cotton yarns from India, Pakistan, Vietnam, Indonesia and other countries signed by port traders in August have arrived in Hong Kong one after another. Cotton yarn for C32S jet is only 20,800-21,000 yuan/ton, which has obvious price advantages over domestic yarns;
2. The pressure on futures hedging orders is gradually increasing
In late August, Dongjiang and Southern Xinjiang seed cotton came on the market one after another. The purchase price of seed cotton (40% lint content) rose from 6.30-6.50 yuan/kg to 6.70-6.80 yuan/kg. It rose sharply again from September 24th to 26th. to 6.80-7.20 yuan/kg, the direct cost of ginner’s “3128 and 2128 grade cotton is about 14,000 yuan/ton (cotton seed 2.60-2.70 yuan/kg). On September 26, CF1701 has exceeded the strong resistance level of 15,500 yuan/ton ( 15,550 yuan/ton). For cotton processing enterprises, the hedging profit from the lint purchased in the early stage has been about 1,000 yuan/ton. Therefore, “hedging” to avoid risks will become the main operation of cotton processing enterprises.
3. Cotton prices will eventually return to the level of supply and demand
A large amount of new cotton has been launched in Xinjiang and the mainland, and a new round of cotton will follow after March next year. Recently, inquiries and transactions of bonded US cotton, Australian cotton, West African cotton and Central Asian cotton at the port have also been very high. It is hot, and the domestic market has sufficient supply of cotton before the Spring Festival. Moreover, the current spot price of 3128 is lower than the Zheng period CF1611 contract price at 300-500 yuan/ton, and Zheng period is already overpriced. In addition, because the purchase price of seed cotton has been significantly higher than the expectations of cotton processing enterprises, slowing down or suspending purchase has become the norm. Once cotton seed prices peak and fall, the continued rise in lint costs will force ginners to lower the purchase price of seed cotton, and cotton prices will subsequently correct.
Taken together, the time for concentrated cotton supply is gradually approaching. Although the weather uncertainty window in major cotton-producing areas has not yet completely closed (especially the weather conditions in Xinjiang, China in September must be continuously followed up), there is a high probability of an increase in global production on the supply side. It is a foregone conclusion; the demand side of cotton will be the dominant factor in cotton spot and futures. Entering September, seasonal demand has good momentum, which will support the spot. After continuous decline, the momentum of Zheng cotton futures continued to decline, but in 2016 In the remaining months of the year, under the premise of sufficient cotton supply, the terminal demand for cotton textile apparel in the international market will hardly see an improvement. Especially against the background of the shrinking Chinese market, the game between the world’s major textile countries will intensify, and the global textile industry will Will be faced with low profits, and domestic and foreign cotton yarn prices are expected to enter a spiral downward trend in comparison with each other. Whether it is international or domestic cotton demand, it will be difficult to see bright spots in the next few months in 2016. Therefore, it is not yet clear whether Zheng cotton futures will continue to rebound or reverse. And know
