Last week (July 20-24), cotton prices first rose and then fell. During the decline, the number of point-price transactions increased. The cotton yarn market maintains a stable trend of slow shipments and low prices. European orders are gradually recovering, but not to normal levels. Poor demand and low prices for imported yarn have put pressure on the sales of domestic cotton yarn. In order to reduce costs, companies actively bid for reserve cotton with high cost performance. The cotton CNCottonB index is 12105 yuan/ton, a weekly increase of 138 yuan/ton. Compared with Zheng Cotton CF2009, the discount is 95 yuan/ton, and the weekly increase is 73 yuan/ton.
Futures. Zheng Cotton’s main CF2009 contract closed at 12,010 yuan/ton last Friday (24th), a weekly increase of 65 yuan/ton. Due to a sharp rise during the session, the fluctuation reached 550 yuan/ton, and the transaction volume increased significantly. The weekly transaction volume was 1,864,089 lots. An increase of 442,611 lots, an increase of 31.1%, a decrease of 15,369 lots, a decrease of 5.1%, and some funds were transferred to January. The top 20 positions held 256,238 long positions, a weekly increase of 5,926 hands, 348,167 short positions, a weekly increase of 8,315 hands, and a net short position of 86,003 hands, an increase of 2,389 hands, a slight increase. There were 18,847 registered warehouse receipts, a weekly decrease of 884. There are 1,576 forecasts, a weekly decrease of 84. The global epidemic situation is still severe and has a tendency to become normal. The escalation of Sino-US friction has worsened the international trade environment. The global economic recovery is facing more challenges. It is expected that Zheng Cotton will maintain a low range fluctuation trend for a long time.
External market: Sino-US relations have tightened again, exports have been bleak, the good weather has faded, and the market has made a rapid correction. The ICE December contract closed at 60.24 cents/pound last Friday, down 171 points for the week. The global trade environment has deteriorated, the epidemic in some overseas areas has not been effectively controlled, and Sino-US friction has escalated. There is uncertainty about whether China’s procurement can continue to be strong in the future. This week’s inertial decline may test the support of the 60-cent round number. Before the epidemic and Sino-US relations improve, cotton consumption will remain low, and cotton prices are more likely to fluctuate in the low range.
Spot aspect. During the rise in futures, trading nearly stagnated. The callback in futures starting last Thursday triggered some transactions at point prices. As the cost of position interest and storage fees increased, some price resources slightly increased the basis when futures fell, and low basis resources continued to be traded. Finally, the remaining resource basis is relatively high. The transaction price of “Double 28” machine-picked cotton in mainland warehouses is concentrated at 12,500-12,600 yuan/ton, and the transaction price of “Double 28” hand-picked cotton is concentrated at 12,600-12,800 yuan/ton; M 1-1/8 Brazilian cotton is at 12,500-13,200 yuan/ton Yuan/ton; Australian cotton is 14,500-15,300 yuan/ton; Indian cotton is 11,800-12,300 yuan/ton. Compared with Xinjiang cotton reserves, the price advantage is insufficient and there are few transactions; US cotton is 12,800-13,500 yuan/ton, and the price/performance ratio is poor Made from Brazilian cotton. High-priced Australian cotton, American cotton, long-staple cotton, and Pima cotton are shipped less. Spinners still adopt the purchasing strategy of buying as they are used and bargaining at low prices.
Operation suggestions. At present, cotton prices are still at a relatively low level, and the epidemic and Sino-US relations are the two dominant directional factors. Others are mostly range-bound volatility factors. The epidemic has a normalization trend. Sino-US relations are unlikely to improve in the short term. The road to recovery of cotton consumption is bumpy and long. Cotton prices will also fluctuate at low levels. As consumption recovers, the bottom will gradually rise. The weather in some cotton areas Factors may increase fluctuations in some ranges. Spinners need to grasp the rhythm and control reasonable inventories and make periodic purchases on dips. </p
