Cotton City'S Macro Environment Is Good, Short Term Cotton Prices Can Rise.

In October 29th, Zheng cotton futures showed strong performance, and the main contract CF2001 rose again, breaking through the 13000 yuan / ton mark, closing at 13025 yuan / ton on the day, rising 180 yuan / ton, or 1.4%. This breakthrough has boosted the confidence of the upstream and downstream businesses in the cotton industry. Some of the ginning companies have made timely hedging in accordance with their own processing costs. From the current situation, can cotton prices continue to rise?

If the time dimension is lengthened slightly, the main cotton futures in Zhengzhou cotton have been on the turn since the low of 11970 yuan / ton in September 30th, and the trend of continued rising in October. The reasons for its rise are mainly affected by the following factors:

After the conclusion of the Sino US high-level consultations on 11-12 October, both sides said that the consultations had made substantial progress. Then China said it would increase the purchase of US agricultural products, while the US side said it would start tariff exclusion procedures. A series of good news had eased the tension in the whole cotton textile market, and created a sexual optimism atmosphere for the uplink of cotton prices.

10 in the first ten days of the month, the harvested cotton harvested in North Xinjiang was concentrated. However, many cotton growers and cotton ginning mills indicated that the yield per unit area had declined, and the output was not as high as the pre estimate level. The price of seed cotton had risen all the way, and the average price difference before and after was at least 0.5 yuan / kg. As a result, the processing cost of cotton ginning enterprises has been pushed upward, which has provided a certain impetus for the rise of cotton prices.

The spot price of lint moved slowly upward. In September, Xinjiang's 3128 class machine picked cotton was quoted more than 12500 yuan / ton, but in recent years, the price of goods picked up by Chen Mian's inland bank was 12700-13000 yuan / ton, and the center of gravity moved upward obviously.

As of 28 days, the total processing volume of the country was 1 million 342 thousand tons, and the volume of public inspection was 872 thousand tons. Therefore, the pressure of new lint listing is expected to emerge after mid November. Although the total domestic supply pressure is still relatively large, but in the short term to a good mentality, as well as the cost of moving upward or become the dominant force in the market. According to the feedback from some enterprises within the territory, the cost of picking up new cotton processing machines in Northern Xinjiang is 13000-13300 yuan / ton, and the low cost resources in the early stage are affordable at 13000 yuan per ton point. However, the target location of resource protection is basically over 13500 yuan / ton in recent years.

To sum up, although there has been no significant improvement in downstream demand since the traditional peak season in September, short-term cotton prices have some support. At the same time, foreign media reported recently: "the office of the United States Trade Representative (USTR) said that it will begin November 1, 2019 to consider extending certain excepted clauses of the import duties added to China last December, which will be expired in December 28, 2019, for up to 12 months." Continue to provide a good atmosphere for the uplink of cotton city.