Recently, Zheng Mian has experienced a downward trend under the pressure of many bad news. The short-term trend is still full of controversy, and it is uncertain between rising and falling. Today’s market is treacherous and changeable, with all kinds of news flying all over the sky. It is not easy to discern the truth behind it.
Based on recent field research, the author believes that Zheng Mian has upward momentum in the short term. The cotton reserve rotation is coming to an end, and the reduction in rotation resources will inevitably boost the market to a certain extent. To determine the specific effect, we need to pay attention to the trend of the cotton market after the holiday. However, judging from today’s market reaction, it seems that the conclusion is being verified.
Of course, the U.S. Treasury Department announced on Friday (September 25) that it would postpone the deadline for sanctions on Xinjiang cotton by two months, which is a positive for the cotton market in a larger sense. Cotton prices dropped significantly last week, largely due to market concerns about the United States starting to impose sanctions on Xinjiang cotton. Now that the sanctions have been postponed, it has temporarily paved the way for Zheng Mian’s upward trend.
In addition to the above conditions, the purchase price of upstream seed cotton opened at a high price, which also played a strong supporting role in cotton prices. According to current information, the purchase price of seed cotton in Shandong and other provinces is 3.3 yuan/catties, and the open-scale price of hand-picked cotton in Xinjiang has reached more than 6.6 yuan/kg, which is equivalent to a lint price of more than 13,500 yuan/ton. If freight and other prices are calculated, the cost price of cotton in Xinjiang will reach about 14,000 yuan/ton, which will cause the price of floral yarn to be seriously inverted. The market has doubts about how long the divergence between the two can last. The most important thing is that with the large-scale listing of resources, the signs of rush to harvest have become more and more obvious. Under the mentality of “if you don’t collect, you will lose money, but there is still a glimmer of hope to harvest”, the purchase price is expected to continue to rise. The consequence is that both the upstream and downstream of the cotton spinning industry will suffer. Withstand the huge operating pressure brought by rising cotton prices.
Spot prices are rising steadily, and futures prices are under pressure and fluctuating. This phenomenon will not last long, and futures prices are bound to return. Of course, the market haze such as the COVID-19 epidemic and reduced consumption have not dissipated for a long time, which has also suppressed cotton prices. After all, cotton prices are now at a low level, and there is a natural need to return to value. Once market conditions permit, Zheng Cotton will respond. </p
