Zheng Mian's rebound cotton cotton is looking forward to rising inside and outside the market, focus

The Sino-US Trade Consultation has been extended to this day. It is not yet clear why the original two-day meeting period should be extended, but US President Donald & Middot and Trump expressed optimism in a tweet earlier, saying that the negotiations with China are progressing very smoothly! uuuuuuuuu It is believed that the postponement of the Sino-US trade negotiations is an indication that both sides are looking forward to reaching a positive agreement. Before the publication, the Ministry of Foreign Affairs sent a message that the Sino-US trade consultation has ended and relevant information will be released soon.



Does Zheng Mian's rebound trend mean that bottoming performance is



In a short week, the rebound trend of Zheng Mian's K-line is actually & ldquo; Qilian Hong & rdquo; which is not easy under the background of cotton market in winter. Although the operation process is full of tangles, the results are really surprising.



At present, the purchase and sale activities of cotton market have fallen to freezing point, and large-scale stock-up has not appeared. The downstream textile enterprises have basically purchased on demand, without the bustling past, why is Zheng Mian rising quietly? The author believes that it may be affected by the following events:



The first is the downgrading news. On the evening of January 4, the People's Bank of China made another big move, announcing that it would lower the reserve ratio of financial institutions by 1 percentage point in January 2019. In 2018, the central bank implemented four downgrades, which was the first comprehensive downgrade by the central bank in 2019. It is understood that the net release of long-term funds will be about 800 billion yuan, which has played a significant role in easing the pressure of private enterprises financing, hedging the cooling of the property market, and boosting confidence in the stock market. Of course, the market is well-funded and has a positive impact on commodities. Zheng Mian's rise is naturally expected.



At the end of 2018, international oil prices finally brought hope to investors. U.S. crude oil contract 05 rebounded from a low of $43.46 per barrel to $49 per barrel. In the process of this wave of rise, the black and chemical sectors have been driven by a large increase, cotton is no exception, but also a certain degree of increase. After all, the rise of chemical fibers is beneficial to cotton. Of course, in the long run, crude oil may maintain the upward trend of the shock. In the short and medium term, crude oil may rebound for a period of time, or there will be downward possibility of the shock.



On January 7, Sino-US trade talks resumed. According to information released by domestic and foreign media and institutions, the atmosphere of the talks was harmonious, and both sides were full of expectations for future cooperation. Of course, other variables may also emerge in the final outcome. From the performance of the US cotton ICE05 contract, the recent three consecutive increases also indicate that Sino-US trade relations are developing well.



These are all recent positive results, of course warehouse receipts and orders still exert great pressure on the spot market. As of January 4, the number of warehouse receipts in Zhengzhou cotton was 16843 (warehouse receipt quantity + effective forecast). According to the calculation of 40 tons per warehouse receipt, the total amount was 673720 tons. In addition, the national cotton industrial and commercial stocks also exceed 5 million tons, creating a historical high. Under the circumstances of abundant market resources, eager hedging enterprises, reduced orders in downstream markets and poor cotton yarn sales, Zheng Mian still faces great difficulties in completing the gorgeous turn.



Cotton is eager to focus on the Sino-US negotiations



China Cotton Network News: On January 7, the US Business Delegation began active discussions with the Chinese Working Group in Beijing on the implementation of the important consensus of the Argentine meeting between the two heads of state. This was the first round of interviews between China and the United States. This negotiation is of great significance and will have an important impact on the commodity market. It is self-evident that the cotton industry is looking forward to the outcome of this consultation in the near future.



Since the first day of negotiations, domestic and foreign cotton futures have risen one after another. CF1905, the main force of Zheng cotton futures, has once again surged to 15,000 yuan/ton. ICE American cotton cotton has also risen to its highest level in nearly a week. In recent months, the contract has reached its highest level of 73 yuan/ton in more than a week.92 cents/pound. Due to the partial closure of the U.S. government, the U.S. Department of Agriculture (USDA) postponed the release of relevant data. Investors'expectations of Sino-U.S. negotiations are also rising when the trend of cotton is uncertain. On the one hand, it is hoped that the negotiations between China and the United States will produce favorable results, and that China's demand will be improved to support international cotton prices. On the other hand, it is expected that tariff barriers will be resolved or that China will increase its purchase of American cotton. The negotiations were extended to the third day after the scheduled completion of the two-day talks. Some investors were slightly disappointed and the cotton cotton cotton came down, which once again highlighted the good expectations of the international market for the talks.



Although the purchase and sale of lint cotton in the spot market has not changed significantly, the divergence of cotton price trend has been increasing, and some cotton-related merchants have increased their price mentality. Recently, the mainstream quotation of Xinjiang Shuang28 cotton picking machine is 15400-15600 yuan/ton, and the mainstream quotation of hand picking cotton is 15600-15800 yuan/ton. Some small-scale production enterprises in Xinjiang sell lint to large producers or mainland traders to guarantee profits. Individual enterprises with strong capital still have strong confidence in the future market. They believe that market structural contradictions are still prominent and high-quality resources still have market competitiveness. Most Cotton Traders expressed the hope that the Sino-US consultation would be beneficial to land as soon as possible and reduce inventory risk.



Early ICE American cotton external market fell, import cotton prices also followed the downward trend, as port Australian cotton inventory ranks first in all imported cotton, cotton merchants pressure is greater, Australian cotton price reduction promotions are obvious, after New Year's Day, port inventory decreased. At present, the spot price of Australian cotton is stable at 16300-16400 yuan/ton, while that of American cotton is 15500-15700 yuan/ton. Recently, the focus of port cotton merchants has turned to the Sino-US negotiations. Some import traders said that if the negotiations lead to large fluctuations in the external market, they will adjust the sales strategy again.



In addition, from the recent Twitter & ldquo issued by President Trump and the very smooth negotiation with China, we can see that both China and the United States hope that this consultation will be fruitful. Therefore, regardless of the outcome, the outcome of the negotiations will have an important impact on the mindset of the operators and cotton prices.



What about the cotton market in the near future?



Xinjiang cotton quotation increased slightly < br />.


On January 8, Shihezi, Kuitun, Changji and other supervisory warehouses in Northern Xinjiang & ldquo; Shuang28 & rdquo; & ldquo; Shuang29 & rdquo; quotation for gross weight pick-up of machine-picked cotton was 15450-15500 yuan/ton and 15550-15650 yuan/ton respectively, up 50-100 yuan/ton from the beginning of January; while in Aksu, Bachu and other places in Southern Xinjiang & ldquo; Shuang28 & rdquo; quotation for gross weight of hand-picked cotton at 3128/2128 level remained stable at 1550-15850 yuan/ton and 15600-15700 yuan/ton. Yuan/ton, but the profit margin of the gin mill is obviously narrowed, and there is little negotiation to reduce the price of five or less contracts for a single purchase.



Inland cotton quotation continued to be weak < br />.


Recently, the purchase price of seed cotton from East Anhui has remained stable. With the approaching of the Spring Festival holidays and worries about the market after the holidays, seed cotton acquisition is not daring to release. At this stage, normal processing operation is maintained. As of January 8, the purchase price of local seed cotton was 3.35 yuan/kg (clothes 38%, moisture 10%, impurities 1.3%) and the purchase price of cotton vendors in the countryside was 3.00 yuan/kg. At present, the local lint cotton sales are still tepid, enterprises to speed up the pace of withdrawal of funds. As of Jan. 8, the local lint transaction price was around 15,000 yuan/ton (delivery, with tickets), down 100 yuan/ton from last week, and the cash delivery price was down 200 yuan/ton.



Zheng cotton futures have been realized this week & ldquo; three consecutive rises & rdquo; < br />.


On Jan. 9, after the opening of the main contract 905, Zheng Mian Futures realized this week's & ldquo; three consecutive rises & rdquo; today's closing price is 15145 yuan / ton, up 90 yuan / ton from the same period last year, an increase of 0.6%. Multi-profitability stimulates futures prices to continue to rise at this stage.



Cotton-related favorable policies in 2019:



Firstly, in order to stimulate domestic demand and economic growth in 2019, China will adopt large-scale tax reduction and fee reduction and active fiscal policies;



Second, in 2019, facing the low level of national cotton storage stocks, the policy of collection and dumping is facing adjustment, etc.



Third, on January 28, 2019, the cotton option contract will be listed on Zhengzhou Commodity Exchange. Industry insiders pointed out that the development of cotton options trading is conducive to the implementation of the policy spirit of the Central Committee document No. 1 of 2018 on & ldquo; steadily expanding & lsquo; insurance + Futures & rsquo; pilot exploration & lsquo; order agriculture + insurance + futures (rights) & rsquo; pilot & rdquo. In addition, after the listing of cotton options, it can provide diversified risk management approaches for the cotton industry, and provide useful reference and effective supplement for improving the current subsidy policy.



In summary, there will be multiple positive factors in the cotton industry in 2019. In the long run, cotton prices in the future have a basis for rising, but whether they can meet expectations still needs the cooperation of the downstream market. The outcome of the just concluded Sino-US trade negotiations may be a key factor.

Key words: Sino-US negotiations on Zheng Mian's cotton