Cotton Policy: The Impact Of The Round Of Postponed Rumours On The Market Is Not All Bad.

Recently, rumors of delayed delivery of cotton reserves have aroused heated discussions in the industry.

Everyone's position is different, the feeling is different, spinning enterprises are happy, cotton enterprises are disappointed, there are still short operations.

The author thinks that, from a rational point of view, the impact of the prolonged rumours on the market is not all bad. In fact, for cotton enterprises, if the boots are delayed, cotton prices will not necessarily fall.

Recently, Zheng cotton fell sharply and the spot remained stable.

On the 21-28 th of July, Zheng cotton fell continuously, with a total drop of over 800 yuan / ton.

As of 28, the closing price has dropped below 15000 yuan / ton to 14590 yuan / ton.

An important factor in the collapse of Zheng cotton is rumors about the delay in the delivery of cotton reserves.

However, the spot market is "steady as Mount Tai".

As of 27, the mainland

The price of "double 29" and "double 30" is still 16800-17000 yuan / ton, and manufacturers say they will never lower the price.

In addition, some manufacturers with reserve cotton spot goods still increase their price by 200-300 yuan / ton in the market.

The rumours of the delay in the rotation are not a curse.

For cotton supply and demand, seeking truth from facts, there must be a larger negative impact.

However, since the announcement of this year's announcement, the industry's policy on the delivery of cotton reserves has been very clear.

In the circular announcement issued by the state, it is very clear that in the process of cotton storage digestion, such as the major domestic and foreign cotton market changes, the national development and Reform Commission and the Ministry of finance will make appropriate adjustments and improvements to the cotton related digestion arrangements according to the spirit of the State Council.

In particular, last year, after the end of August 31st, the reserve cotton liner was postponed to September 30th due to market reasons.

According to the circular announcement and the situation of last year's rotation, we have long anticipated the possibility of the continuation of the round this year and the bad profits are already being digested.

There is a structural imbalance in market supply and demand.

In the near future, more and more

Feedback, Xinjiang cotton is not enough, especially in July cotton, the daily listing of Xinjiang cotton reserves accounted for only 1/3, about 10 thousand tons per day, the turnover rate is still 100%, the increase in the 1000 yuan / ton line, indicating that everyone is still "cotton thirsty" for Xinjiang cotton.

In the spot market, Xinjiang cotton is also "one ticket is hard to find".

In this case, Xinjiang cotton will be "Luoyang paper expensive" in 9 and October.

If the rotation is postponed, the supply of Xinjiang cotton will probably increase and the market will be solved.

The problem of imbalance.

Entering the CotlookA index in August, the data in August will be used. The adjustment of its monthly adjustment may lead to a big change in prices.

According to Cotlook official website data, on July 24-31, the CotlookA index price basically fluctuated around 85 cents / pound.

In August 1st, the CotlookA index had dropped to 79 cents / pound, much lower than the last week's price index in July.

As the weekly sale price is set up according to the index of cotton spot price in the international and domestic markets in the previous week, when the CotlookA index changes a lot, the bottom price will inevitably be adjusted accordingly.

Accordingly, market participants have been estimated based on the formula for calculating the bottom price, which is about 500 yuan per ton.

I believe that even if the CotlookA index price only accounts for 50% weight, but the bottom price is expected to hit a new low.

At that time, the paction price of cotton reserves will probably decrease significantly, which will inevitably impact the spot price of the market.

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