Close Attention Should Be Paid To The Trend Of National Policy In The Two Days Of Internal And External Cotton Fires.

Inside and outside cotton, ice and fire

Over the past two weeks, cotton has shown a completely different trend.

The price of cotton in the mainland (19770, -30.00, -0.15%) showed a slight upward trend, while the outer cotton showed a sharp downward trend.

Resulting in internal and external

The gap continues to widen.

September 10th -9 14 this week, the CNCottonB index and CCindex328 index rose slightly 2 yuan / ton, in September 14th, respectively, 18754 yuan / ton and 18635 yuan / ton, or 0.01%, or less than the previous week.

The FCIndexM index fell 1.17%, FCIndexM 1%, and customs prices fell 166 yuan / ton, compared with 14288 yuan / ton in September 4th.

The difference between inside and outside cotton price reached 4300 yuan / ton, and the spread widened 168 yuan / ton.

In terms of futures, Zheng cotton's overall trend was down last week. The main contract 1301 fell 120 yuan / ton, or 0.07%, but this week began to rise.

ICE cotton futures fell 0.32%.

The main reason for the different cotton trends is that the international and domestic factors that affect the cotton market are different.

First of all, to see the international cotton market, the international cotton market is mainly controlled by the basic situation. Due to the deepening of the international cotton supply pattern, the foreign cotton market is basically loyal to the fundamentals and is going down.

However, the domestic cotton market is mainly controlled by the policy side. Because of the protection and support of China's unlimited purchasing and storage policy, even if the fundamentals are weak, the domestic cotton prices can still stay firm.

This is the key reason for the different trend of internal and external cotton and the expansion of the price difference.

Although the purchase and storage has been officially launched, the cotton that has fallen to a very low price in the first two weeks has not been on the way to the reserve price as scheduled, but it appears to be somewhat slow.

This is because before the purchase and storage started, the state took the lead in implementing the dumping and storage measures. The reason has been explained in the preliminary report that it may be complying with the downstream textile enterprises' protest.

Rumour has long been heard about throwing storage, which has just offset some of the support for the purchase and storage, which is the key to why domestic cotton prices are blocked.

But earlier this week, relevant departments announced that they will stop this month.

The news is that after the news was released, Zheng cotton rose sharply every other day.

After the resistance factor of the dumping and storage is disappearing, the domestic cotton should have a small increase in space on the basis of purchasing and storing.

The current trend deviates from the strong base.

From the base case, last week, the price difference between the 1301 settlement price of the main cotton futures contract and the CCindex328 index narrowed, as spot prices stabilized and futures prices fell.

In September 10th, the base rate was -995, while the 14 day base was -873, and the base strength was 122.

Yesterday, Zheng cotton futures rose sharply, the current spreads were enlarged and the basis was weak, reaching below -1000.

Seed cotton purchase price increases, processing profit reduction

Since seed cotton went on sale, seed cotton purchase price has been rising, which is more than that of cotton lint. This may indicate that the processing profit of lint processing enterprises will decrease.

China's cotton purchase price index rose 165 yuan / ton last week.

At present, the purchase price of cotton seed in the mainland is about 4.2 yuan / kg, the cost of lint processing is 500 yuan / ton, the cost of lint production is around 19500 yuan / ton, and the profit of processing enterprises is about 1000 yuan / ton.

Because of the heavy rain and the poor quality of seed cotton in Dezhou this year, many cotton enterprises went to Xinjiang to buy seed cotton processing, and the purchase price of seed cotton from Xinjiang (including freight) was around 4.6 yuan / kg, and the profit of the company's storage and storage was between 500-1000 yuan / ton.

Throwing storage will end, storage and storage prospects are good.

Last week, the situation of dumping and storage was not ideal, and the actual volume of turnover continued to decline.

As a matter of fact, the paction has not been ideal since the beginning of the self dumping operation.

Now that the relevant departments have decided to stop dumping, this factor will no longer form a resistance to cotton prices.

After three consecutive days of no paction, the stock market finally made progress on the fourth day. Although the amount of seed storage has not yet been listed in large quantities, the trend is increasing.

In the later stage, with the continuous sale of seed cotton, there will be a lot of downstream production of lint processing enterprises.

therefore

There should be some room for further growth in the late stage, but we should pay close attention to the trend of national policies. After all, China is now a policy city.