A Sharp Rise In The Turnover Rate Of Cotton Reserves Is Not The Evidence To Usher In "Bright".

This week, the turnover rate of cotton reserves rose sharply.

On Monday and Tuesday, the turnover rate of two working days is 82.86% and 83.85%.

The turnover rate increased by 20-30% compared with last week.

Why are there so many changes? There are several reasons:

First, take a beating based on bullish psychology.

On the 17 day, a cotton trader in Shandong said that the rise of Zheng cotton since last Friday has brought great confidence to the whole market.

"Zheng cotton CF1709 contract rose to 17000 yuan / ton is not big problem.

If it breaks through 17000 yuan / ton, then it will be a smooth future.

The cotton trader said that the auction companies, especially traders and large textile enterprises, had greatly increased their enthusiasm for auction. All the reserves of Xinjiang cotton were "collected according to the regulations".

Two, the number of new cotton exported from Xinjiang is not low.

On May 15th and 16, Xinjiang cotton came out of 13165.61 tons and 13796.166 tons, and all of them were sold.

Judging from the proportion of Xinjiang cotton, the total volume of the 2 trading days is 29 thousand and 900 tons and 30 thousand tons, and Xinjiang cotton accounts for more than 44% of the total.

Three, spot sales are better.

Most of the reserve cotton began to sell in the spot market. On the 16 day, "double 28" reserve Xinjiang hand picked cotton, a cotton trader in Zhengzhou came out at a price of 16400 yuan / ton (pick up and gross weight), and there was no discount and cash settlement.

Even if the 3128 level reserve real estate cotton price is also 15700 yuan / ton line, sales are acceptable.

"Now the supply of New Territories cotton is in short supply.

It can also be sold smoothly.

Many traders said that the current sales of Xinjiang cotton sales profit of 350-400 yuan / ton, reserve real estate cotton 200 yuan / ton line, clear profit, who is not in the rush?

The recent increase in the turnover rate of cotton reserves is not the evidence that the market will soon usher in "bright". It is also necessary to observe the trend: there is no obvious benefit in downstream consumption.

Recently, domestic cotton yarn market is stable and weak. Pure cotton yarn except general combs 32S, 40S, combed 21S sales are still available, other yarn branches are generally weak, orders are short, short and scattered, and the profit margins of spinning enterprises have dropped by 400-500 yuan / ton recently.

In this case, it is self-evident whether the high cotton price can be supported.

Is it really a breakthrough of 17000 yuan / ton?

On the 16 day, Zheng cotton rose slowly.

The rise of Zheng cotton is driven by the sharp rise in ICE cotton. But according to the May Global Forecast of production and demand released by the US Department of agriculture, the cotton planting area will rebound to nearly 3 years high in 2017, and the global output is expected to grow by nearly 7%.

This brings uplink resistance to ICE cotton, and there are more variables in Zheng cotton later stage.

On the outside side, the US cotton planting area increased in 2017/2018, although the July contract rose, but the December contract rose significantly less than the July contract. Part of the reason is that the cotton production is expected to increase significantly in the next year, so the external market can not continue.

On the inside side, there are reserve cotton on the supply side. In addition, as of the end of April, the total amount of cotton business inventory in the whole country still has 1 million 870 thousand tons. From the supply point of view, the domestic market is not short.

In the long run, we need to observe the listing of cotton reserves and paction.

"This cotton rush is a good opportunity for intervention."

Xu Aixia believes that in the current situation of the domestic market, there is an increasing trend in the stock of downstream cotton yarn and grey fabric. Recently, the purchasing strength of textile enterprises has been weakened, and the supply of cotton in the market is abundant. It coincides with the delisting of contracts in May.

Along with the decline of American cotton, the pressure is still greater than that in the later stage of Zheng cotton.

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