As of late July, the Zheng Cotton CF2109 contract has approached the strong resistance level of 18,000 yuan/ton. The bullish sentiment in the futures market is relatively enthusiastic. However, it is obvious that end consumption of cotton yarn, gray fabrics, fabrics, clothing, etc. cannot keep up with Zheng Cotton. With the rapid rise of Zheng cotton yarn, the pressure of rising raw materials cannot be effectively transmitted to the downstream, and the entire cotton textile industry chain has fallen into a temporary “intestinal obstruction” state. Therefore, the main contract of Zheng cotton has made a slight correction in the past two days, with the long and short sides at 17,500 yuan/ There is a stalemate and game around tons. It remains to be seen whether it is ready to rise or whether it has peaked and fallen.
August has entered four “critical periods” for the cotton market: First, the weather in Xinjiang cotton areas in August/September determines the current trend of cotton futures in 2021/22. is a critical period (according to data released by the Bureau of Statistics and the Cotton Association, Xinjiang’s cotton planting area and Xinjiang cotton output accounted for more than 85% and 90% of the national total respectively in 2020/21). The impact of the recent persistent high temperature and drought weather on the development, growth and budding of cotton in Xinjiang cannot be underestimated; secondly, while the maintenance of machinery and equipment of cotton enterprises has entered a climax in August/September, the application for cotton support acquisition loans in 2021/22 has also gradually Expand. In 2021/22, the credit support and amount of cotton purchases by the Agricultural Development Bank of China and other commercial banks are worthy of attention; thirdly, according to usual practice, winter and spring textile and clothing orders will fall one after another in August/September. “More prosperous” deserves attention; fourth, the impact of the central bank’s monetary policy on the cotton textile industry in August/September is very important. According to industry analysis, in response to the “opening of the floodgates” by the Federal Reserve, the European Central Bank and others and to ease the cost pressure on enterprises, especially small and medium-sized enterprises, monetary policy is expected to be relaxed to a certain extent in the second half of 2021, and the RMB exchange rate is facing great depreciation pressure.
Judging from the survey, cotton textile, fabric, clothing and other companies generally agree that domestic cotton prices will run at a high level in 2021/22. On the one hand, the international market for crude oil, chemicals, black It is difficult to alleviate the imported pressure on the continued rise of heavy metal commodities; on the other hand, in 2021/22, Xinjiang’s cotton yield and total output are expected to double, and there is a serious imbalance between Xinjiang’s processing capacity and cotton resources, and the general environment for cotton companies to gamble on the market Next, the purchase price of seed cotton in 2021/22 is more likely to open higher; coupled with the continued recovery of the domestic cotton textile and apparel markets after the epidemic, cotton prices are easy to rise but difficult to fall, but they need to provide support for gray fabrics, fabrics, and clothing. It takes time for various links such as foreign trade companies and foreign trade companies to accept and digest the violent rise in cotton yarn, which is not conducive to the layer-by-layer transmission of costs, triggering a decline in terminal order receiving/order arrangement and clearing demand. Therefore, for the entire cotton market, there is still a long way to go. Don’t shoot yourself in the foot. </p
