Market Observation: Attention To Position Changes, Weakness Of American Cotton Dragged Zheng Mian Down

The weakness of American cotton dragged down the market, and domestic textile demand entered the off-season, and market confidence continued to be suppressed. All contracts of Zheng cotton were closed in green market. The main force of 2409 contract increased its position in a large scale and fell. The entry of short funds depressed the price of the period, which fell below the two-week low of 15120 yuan, down 2.29%. The trading volume was significantly enlarged, and the position increased to 551000 hands.

The new season sowing in the United States is progressing smoothly, and the growth of new cotton is significantly better than that in previous years. The production situation of American cotton is good, and the main production area Texas is experiencing rainfall, which will help to increase the annual yield. The widespread negative sentiment in the agricultural product market also put pressure on the cotton market. ICE cotton fell for the second consecutive trading day on Thursday, hitting a low point for more than a week. ICE July cotton futures contract closed 4.1% lower at 77.76 cents per pound.

Domestic cotton enterprises actively sold, and some enterprises slightly lowered their prices for promotion in order to reduce inventory. However, the phenomenon of textile off-season is obvious. Textile enterprises still lack orders, and the inventory of finished products of enterprises has increased slightly. Most textile mills are not active in purchasing raw materials, and maintain the strategy of purchasing lint as needed.

Recently, some cotton regions in Kashgar, Korla and Aksu, the three major cotton regions in southern Xinjiang, have experienced severe convective weather, and some cotton fields have been damaged due to strong wind, rainstorm and hail. However, cotton farmers actively remedy the problem by reseeding and reseeding. The scope of adverse weather is limited. In addition, the weather in the northern Xinjiang cotton region is generally good, and the growth of cotton seedlings is better than the previous two years. The industry mostly maintains the judgment that the planting area in Xinjiang will decrease slightly and the output will increase slightly in 2024/25.

The cotton fundamentals are generally empty. Yong'an Futures believes that it is mainly based on the large supply and demand pattern and the current consumption slack season, and the slack season is expected to continue. Therefore, the internal and external rebound based on valuation and trading factors ended and weakened again. At home, the commodity environment has also weakened as a whole. It is short in the short term, but after the price falls, it will still face valuation resistance again. In the future, you can focus on position changes and previous low performance.