Zheng Cotton Broke Thirty Thousand Pressure &Nbsp; The Risk Of The Latter Market Dropped.

1, global worries about supply and demand are heating up again.

This week (1.17-1.21), as the textile business multi head guarantee plate boosted and India exports will maintain 5 million 500 thousand packets of good news support, the US cotton strong upward, as of the 21 day electronic disk trading time, the US cotton March index contract rose 15.50 cents, or 10.96%, closed 156.93, close to the previous 159.12 cents historical high.

2, fundamentals slightly better, Zheng cotton broken pressure uplink

This week, Zheng cotton made a sudden progress in steady progress and broke through 30 thousand points of pressure at one stroke.

The market was relatively rational before Friday, and it did not completely improve in fundamentals, but it was moderately uplink for better future expectations. But on Friday, speculative funds suddenly entered the market to boost Zheng cotton.

Finally, the main 1109 contract closed at 30875 points, up 1965 points, or 6.80%, but the turnover reduced by 203 thousand hands, 2 million 705 thousand hands, increased 39996 positions, 274 thousand hands.

Two. International market

1, India has greater restrictions on export policy, or supports the rise of international cotton prices.

In January 21st, a senior official of the India government said that the Committee of the relevant departments decided to maintain the quota of cotton exports in the current market year at 5 million 500 thousand packs.

The official, who does not want to be named, said the group will meet again in February 10th to revisit the quota.

Local traders once lobbied the government to increase export quotas to gain profits at the time of rising international cotton prices, but the India textile industry opposed this practice. They pointed out that domestic cotton prices were still at a high level.

Overall, the estimated export volume is lower than the market expected.

In the future, India's export policy will also be determined according to its domestic cotton price, so cotton export still faces policy risks.

2, affected by floods in Australia, cotton production is a foregone conclusion.

Since the end of last month, heavy rains and floods in Queensland, Australia have flooded large cotton fields.

Australia's cotton production area is very concentrated, basically in southern New South Wales and central Queensland, of which New South Wales has 70% of planting area and 30% of Queensland.

The flood in Queensland is expected to result in a 10% reduction in cotton production this year.

Because more than 95% of cotton is exported every year in Australia, the reduction of production will definitely reduce the future.

Three, the fundamentals of the lower reaches of the country have changed quietly.

1.

Near the Spring Festival, the traditional replenishment period of textile enterprises will end, as some enterprises have already made a holiday in advance, resulting in a decline in the willingness of the whole market to supplement the Treasury.

Although the volume of turnover in the whole market is not very satisfactory, after all, the supply gap in the Chinese market exists, which has also led cotton producers to agree favorably with the market outlook.

Cotton spot quotation is also very strong, steadily rising.

This week, China's cotton price index (level 328) rose 182 yuan, closing at 27901 yuan / ton, 527 yuan up 99 yuan, 25833 yuan / ton, 229 yuan, 141 yuan, 28816 yuan / ton.

Figure 1: cotton spot price trend

The picture shows the spot price chart of cotton.

(source: interim Research Institute)

2, textile enterprises orders more and more stable yarn prices

Recently, orders for textile enterprises in the downstream textile market have been increasing. Due to the high price of cotton and yarn, the demand for high count yarn has weakened, and demand is still slightly weaker. However, sales of low spun yarn are good and market demand is increasing.

Overall, it is expected that the downstream textile market will be better in the future after the Spring Festival. This is also the expectation of most textile enterprises, so the price of yarn is very strong at present, and the latter market should be easy to rise and fall.

This week, KC32S rose by 400 yuan to 36200 yuan / ton, and JC40S rose 100 yuan to 43100 yuan / ton.

Figure 2: cotton yarn price trend {page_break}

The picture shows the price chart of cotton yarn.

(source: interim Research Institute)

Four, Zheng cotton needs rational callback.

Judging from the current fundamentals of cotton, although the sales of the downstream textile yarn have improved, and cotton traders are optimistic about the post holiday period, the long-term bullish goal is unchanged, but they do not support the current irrational increase. After the Spring Festival, part of the textile enterprises have been on holiday, and objectively speaking, cotton needs to fall slightly.

From the technical point of view, Zheng cotton rose in good shape, along the 5 day moving average.

The number of positions has also increased, proving that the market is still holding more optimistic expectations for the future market.

However, the short term sharp rise of Zheng cotton seems to be somewhat out of touch with the fact that the spot market has a big discount. Now, near the Spring Festival, the sales situation of the downstream cotton is rather light, so it is difficult to estimate the spot price to follow the sharp rise of the futures price.

Therefore, Zheng cotton needs a certain pullback in the short term, but it remains bullish in the medium and long term.

In terms of operation, short term investors can meet the high selling strategy in the day.

For long term investors, a more modest amount will be reduced at the beginning, and then the callback will be added to the 29000 point.