Why the market appears inside and outside the cotton market, "two days"
In December 2017, both the domestic cotton market and the foreign cotton market were extremely hot and cold. After the main March contract in the US cotton settled at 70 cents / lb mark, the S & P advanced sharply at 80 cents / lb. The main Zheng cotton from 15500 yuan / ton line drop, once broken under the threshold of 10,000, the recent narrow oscillation, dilemma.
US cotton exports beautiful data
According to statistics, as of December 28, 2017, the United States has signed a total of 2.552 million tons of cotton for 2017/2018 export, accounting for 78% of annual exports, up from 11% of the five-year average, up from 17 %, Which is an important reason why the US cotton prices continued to rebound strongly. Although the sales of US cotton have worsened in recent two weeks, the current time is not more than half of this year, while the exports of US cotton have been signed by more than half. In particular, overall sales data is very strong as the sales season is approaching. In the meantime, the loosening of China's cotton quota policy will also bring a sustained positive effect on the exports of the U.S. cotton, so the pullback of the U.S. cotton prices is limited. Recently, some domestic market participants believe that a large part of the rise in US cotton is due to the non-point price position. Unfixed On-Call Sales are part of a commercial position and are understood as hedging positions based on basis trading. The participants are cotton traders. The call instruction issuer is usually the factory (or other buyer). In principle, the cotton trader (the seller) closes the hedging task and obtains the base return after issuing the point price instruction from the buyer. Of course, the actual situation may be different, there may be lagging behind or leave some exposure and so on. US cotton exports strong contract data, hedging positions short positions hedging naturally increased, the disk confirms the spot market sales hot situation.
Domestic spot sales are slow
At present, this should be the replenishment season for textile enterprises, but we see weaker replenishment efforts. A pre-State Reserve stocking too much stock, concentrated cotton market, adequate resources, but rather look at spinning leisurely. Second, the reserve cotton which will start the new year in March will be rolled out. For the new high cotton price, the downstream is not "cold". Xinjiang standard grade machine pick cotton prices from the previous 15500 yuan / ton above the slide to 15000 yuan / ton line. The current spot price dropping to ginning near the cost, ginning plant will be at a loss or parity sales is also a problem. Estimated cotton consumption for the year was 8.5 million tons, with an average monthly volume of just 700,000 tons. At the same time, the price of yarn in the market is lower than that of the foreign yarn again, and the subsequent domestic consumption is not bad. As time goes by, ginners as long as withstand the pressure, the market outlook will usher in the dawn. The actual production of textile enterprises in the reserve of cotton must be used with a certain percentage of new cotton, so although the late replenishment late, but will eventually cash.
Domestic and foreign cotton spread narrowed to the normal low level
As of January 8, Zheng cotton warehouse receipts generated 4086, forecast 1143, and last year's peak warehouse receipts 5288, forecast 1369 compared to less 1428, but the delivery volume is still relatively large. Generate a large number of warehouse receipts, of course, have registered in Xinjiang warehouse delivery convenience factors, but more cotton increased production, poor spot sales, making a large influx of resources into the futures market. How to solve the problem of warehouse receipts, should be the focus of the market. Recent domestic and foreign cotton spread rapidly dropped from the high, from the peak of 3,000 yuan / ton near the current down to the current 1,000 yuan / ton less than. Domestic and foreign cotton spread between 1500-2000 yuan / ton is generally accepted domestic spread level, too high or too low will lead to increased competition in the cotton yarn market. The current domestic and foreign cotton spreads are conducive to the recovery of domestic textile competitiveness. If the low spreads remain for a long period of time, coupled with the release of cheaper cotton reserves in the latter part of China, this will be conducive to boosting domestic cotton consumption and boosting the cotton price. . From a fundamental point of view, the strong cotton and cotton Zhengmei weak situation can still be maintained; from a statistical point of view, the spread between the two fell to a low, you can consider throwing buy arbitrage within the cross-market operation.