Market Analysis: Internal And External Market Trend Differentiation Zheng Mian Hit A 3-Week Low

 

On Wednesday, Zheng Mian's main contract opened low and went low, hitting a three week low in the session. The USDA monthly supply and demand report has too many data, and the 2023/24 US and global cotton production estimates have been lowered. However, the strength of the external market did not bring much boost to the domestic market. The turnover rate of reserve cotton sales fell in the past two days, and the market was worried that the performance of the downstream golden nine silver ten peak season was not as expected. In the future, we continued to pay attention to the sale and storage, downstream demand, and the purchase price of new cotton.

Many domestic factors restrict each other. New Lake Futures said that the short position mainly lies in the policy side of the pressure. In terms of domestic dumping and storage, affected by the policy of dumping and storage and the high starting price, there have been auctions for two consecutive days. In terms of bulls, under the premise of overcapacity of ginning plants and high probability of year-on-year production reduction of new cotton, the probability of rush harvest still exists and cannot be verified. In addition, the recent price of hand picked cotton in Xinjiang is high, ranging from 8.5-9.8 yuan/kg, which further stimulates and strengthens the market's expectation of high opening and closing prices. On the downstream market, according to Huarong Rongda Futures, the expectation of pure cotton yarn peak season is gradually fading, the feedback of downstream order increment is insufficient, and the trading is flat. The downstream just needs to purchase, slightly replenish the stock, and textile enterprises mainly carry out small orders. Overall performance was weaker than previously expected.

As for the evolution of market logic, Zhongtai Futures said that under the pressure of gradual increase in phased supply and structural contradiction between spinning loss pressure and demand season, expected production reduction, cotton price rise is under pressure. Guoxin Futures said that the international cotton market was boosted by the monthly report of September released by the US Department of Agriculture, with a strong trend. Domestically, the overall atmosphere of commodities is empty, and the accumulated inventory of cotton yarn begins to suppress the market. Cotton prices look for support. In terms of operation, it is recommended to focus on band trading.