Expected Good Cotton Futures Rebound Downstream Support Strength Is Insufficient

Last week (October 28th -11 1), in the Sino US negotiations on schedule and new cotton production may be reduced by the positive expectations, Zheng cotton continued to rebound, seed cotton purchase prices follow suit rise, acquisition costs rise. However, under the pressure of insufficient orders, the cotton price has not been transferred to cotton yarn synchronously, and the sales volume of cotton yarn has increased slightly. Compared with a large number of old cotton stocks, new cotton sales lack of price and quality advantages are slow. According to the national cotton market monitoring system, as of November 1st, the sales rate of new cotton was 5.2%, lower than in previous years, and the acquisition cost was low. Cotton price CNCottonB index price 12879 yuan / ton, compared with Zheng cotton futures CF2001 contract, spot discount 206 yuan / ton, facilitate warehouse receipt registration.

Futures. Zheng cotton broke through the 60 day moving average and continued to go up. The main contract CF2001 closed at 13085 yuan / ton on Friday, rising 310 yuan / ton in the week, active trading, active capital admission, 4046704 turnover in the week, an increase of 58.2%, 731982 positions in hand, 36138 increase in the week, an increase of 5.2%. The rebound after the festival has exceeded 1000 yuan / ton, reaching the high point near the previous stage. As textile exports decreased, new orders were insufficient, cotton yarn inventory was high, cotton prices did not appear after the cotton prices rose, increased procurement increased, the current cotton price rebounded failed to effectively pass back, new cotton sales slow, business guarantee positive, Zheng cotton callback order waiting for cotton yarn price follow-up probability. In addition, although Sino US negotiations are advancing, there has been no substantive progress. Judging from the negotiation process over the past year, there are many uncertainties behind it, which will bring unexpected bad profits to the cotton market at any time.

Us disk: Although Sino US negotiations continued to maintain contacts, but did not release the real good, spot sales unsatisfactory, the United States cotton waiting for news, December contract around 65 cents / pound line of shock consolidation, Friday closed at 64.64 cents / pound, week down 33 points. The Sino US trade war has resulted in a reduction in China's exports and a corresponding reduction in imports. It has already affected the consumption of cotton in Southeast Asian countries, directly affecting the consumption of cotton and cotton. New cotton has been on the market and output has increased. If there is no good stimulus, there may be a callback arrangement this week. Continue to track the progress of trade negotiations and cotton weather.

On the spot. Futures rebounded and market confidence improved, but orders were still insufficient. Cotton mills were still cautious in purchasing spot goods, and there was no catch up purchase. After the new cotton wadding is replenishment, it will gradually become deserted, and the New Cotton Horse value is higher. The turnover is still mainly 18 years old cotton. After the rebound in futures, spot quotas were generally raised. The mainland's 3128 hand picked Xinjiang cotton price is 13300-13800 yuan / ton, and Xinjiang cotton is 13100-13600 yuan / ton. As the speed of cotton rising is faster than that of inner cotton, the cost of importing cotton is increased, and the price of internal and external cotton is upside down.

Acquisition of new cotton. At present, the picking rate of new cotton has reached 85%, and the sales progress has been over 80%. Under the impetus of the rebound of futures, the purchasing price has steadily risen, the purchase price of hand picked cotton is 5.8-6.2 yuan / kg, and the cotton picking price of machine picked cotton is 5.2-5.6 yuan / kg, and the price of cottonseed is steadily rising, which is about 1.75 yuan / kg. Acquisition costs rise, sales profits fall and acquisition risks rise. As of November 1st, 795 enterprises in the country reported 1 million 180 thousand tons of public inspection, a decrease of 46 enterprises compared with the same period last year, and the number of public inspection decreased by 120 thousand tons compared with the same period last year. Judging from the quality data of the cotton that has been checked, the length, strength and horse value of the new cotton are slightly worse than that of last year.

Operation suggestion. Zheng cotton main force CF2001 has rebounded 1125 yuan / ton after the festival, arrived near the high point, new cotton sales slow, the current cotton price rise has not been effectively delivered to cotton yarn, adequate supply, insufficient consumption, a large number of new cotton at any time may enter the hedging, the disk has callback requirements. We will continue to focus on the progress of Sino US negotiations and the consumption of orders.