Experts: Cotton Pattern Has Long Been Decided.

Yang Ruixia, director of the agricultural products group of Anxin Futures Co., Ltd.

The current country has invested in the leader of the agricultural products of security letter futures.

Wei Jianxu, an agricultural research fellow at Anxin futures

Wei Jianxu is currently a research fellow in agricultural products of Anxin futures company, and is a Bachelor of finance.

He worked in the headquarters of China cotton group and owns Xinjiang.

Experience in the production area, with hundreds of millions of dollars in solid trading experience.

At present, we are committed to the strategic research and development of agricultural products.

The basic research and development of futures, including quantitative trading, risk management and commodity options, are combined with economic cycle research.

Core view

Global market review: ICE cotton prices drive up the spot price of international cotton. In the first quarter, the US cotton main contract closed up more than 7%, closing at 77.60 cents / pound in March 29th, but cotton prices fell slightly this week.

The price quotas of US cotton, Australia cotton, Brazil cotton and India cotton in domestic port port warehouses have been steadily raised. The number of imported cotton imported by domestic textile enterprises is stable, and the stage is superior to that of Xinjiang cotton. Some factories use imported cotton quotas earlier.

Planting intention report: USDA planting report Lido cotton price. In March 29th, the US Department of Agriculture announced the 2019/20 crop planting report, of which 2019/20 cotton planting area was 13 million 780 thousand acres in 2019/20, compared with 18/19 decreased by 2.26%.

The area of cotton in the United States decreased by 2.35% compared with 18/19 last year, and the US Pima cotton area increased by 2.41% over the same period last year, 18/19.

Last Friday, ICE cotton price increased by more than 2% on a single day, and the trend of technology graphics continued to rise.

Up to March 26th, the latest data of CFTC cotton futures and options were first recovered to zero axis for the first time in 2019.

The national cotton reserve policy: in early 2019, Pu city believed that the sale of national cotton stores in 2018/19 will start in March as scheduled, but the fact is that the incident did not happen and exceeded market expectations.

The remaining 2 million 500 thousand tons of cotton resources in the reserve cotton market is one of the key concerns of cotton enterprises and investors.

Money supply and social integration: in the fourth quarter of 2018, the domestic money supply grew steadily. The supply of M0, M1 and M2 was at the highest level in the past 5 years, and the year-on-year rate of change of the three kinds of money supply was in a low position.

As of February 2019, the supply of M1 and M2 reached a new high in the past 5 years. From the domestic macroeconomic indicators, it is not difficult to find that the current money supply is adequate.

The scale of social financing was stable and upward. In 2018, the figure was 19 trillion and 260 billion yuan, of which the proportion of new RMB loans was always higher than that of new foreign currency loans.

In January 2019 and February, the social and economic data were 4 trillion and 630 billion yuan and 702 billion 900 million yuan respectively. In January 2019, the value of the social economy in the past 5 years was the largest, far exceeding the sum of the fourth quarter of 2018.

He said.

Warehouse receipts: the annual increase in the number of cotton warehouse receipts (including effective forecasts) in 2018/19 has become normal this year. We have made relevant predictions in the 2019 cotton annual report, that is, the number of Zhengshan cotton warehouse receipts in 2018/19 has increased at least 1 times over the 2017/18 year, and is expected to exceed 1 million tons.

As of April 3rd, the number of cotton warehouse receipts (including effective forecasts) was 21145, about 909 thousand and 200 tons, respectively, exceeding the CF1905 contract and CF1909 contract position (Dan Bian), and accounted for about 52.86% of the total +CF1909 contract of the CF1905 contract (Dan Bian) 52.86%. Zheng cotton September contract should undertake the CF1905 contract warehouse receipt pressure.

Operation suggestion: CF1905 and CF1909 contract unilateral strategy is based on wait-and-see, choose to buy CF2001 contract.

Buy or hold more ICE cotton contracts.

Risk warning: climate impact and overall macroeconomic performance during new cotton planting.

Global cotton market in the first quarter of 1.2019

ICE cotton prices led to the uplink of the international cotton spot price. In the first quarter, the US cotton main contract closed up more than 7%, closing at 77.60 cents / pound in March 29th, but the cotton price fell this week.

The price quotas for spot sale of cotton, cotton, Brazil cotton and India cotton in domestic port port warehouses have been steadily raised. The number of imported cotton imported by domestic textile enterprises is stable, and its phase ratio is better than that of Xinjiang cotton.

USDA Agricultural Outlook report (global).

In February, 2018/19 and 2017/18's global cotton supply and demand situation were as follows: Cotton initial inventory 80 million 450 thousand packs, increased by 0.81% compared to 17/18; cotton output 118 million packs, compared with 17/18 4.24%; cotton import volume 42 million 310 thousand packs, increased 3.37% compared with 17/18; cotton export volume 42 million 320 thousand pack, increased 3.42% than 17/18; cotton terminal inventory 75 million 500 thousand bags, 17/18 6.85% 6.85%; cotton inventory consumption than 61.1, 17/18 decreased by 61.1.

Global cotton output and ending inventory declined year by year, and export volume and trade volume increased year by year. Four indicators played a supporting role in international cotton spot price.

In March, the US Department of agriculture increased the initial inventory, output and ending inventory of 2018/19 in the world by 81 million 140 thousand, 118 million 890 thousand and 76 million 90 thousand packs respectively, and reduced cotton imports, consumption and exports to 42 million 180 thousand, 123 million 590 thousand and 42 million 180 thousand packs respectively.

According to the change of global cotton output and consumption, the latest output change has entered the negative range, and returned to the level before 2016. The smallest change in data since 2015 is about -20%. Investors are looking back at the trend of cotton futures in 2016. The global cotton consumption has changed little, but in 2017 or 2018 years, it has exceeded 3%, and the consumption capacity has improved significantly. The market is expected to grow flat or slightly in 2019 over the same period last year. The global cotton warehouse consumption is lower than the 5 consecutive years.

We should pay attention to large numbers of internal resources and not lose sight of every market interpretation.

2. planting intention of cotton producing countries in the Northern Hemisphere

2.1 cotton planting intentions in the United States

USDA planting reports Lido cotton price.

In March 29th, the US Department of Agriculture announced the 2019/20 crop planting report, of which 13 million 780 thousand acres of cotton planted in the United States in 2019/20, down 2.26% from 18/19.

The area of cotton in the United States decreased by 2.35% compared with 18/19 last year, and the US Pima cotton area increased by 2.41% over the same period last year, 18/19.

Last Friday, ICE cotton price increased by more than 2% on a single day, and the trend of technology graphics continued to rise.

Up to March 26th, the latest data of CFTC cotton futures and options were first recovered to zero axis for the first time in 2019.

2.2 meteorological monitoring of cotton producing areas in the United States

According to NOAA data, in the next 8-14 days, the peripheral temperature of WY state in the US is lower than that in GA and FL two states. The temperature of TX and GA two states is similar and slightly higher than the anomaly value. The precipitation is concentrated in the central part of the United States. The precipitation in the cotton producing area covered by the precipitation cloud cluster is slightly higher than the anomaly value, and the precipitation around MS and TN is adequate.

Studies show that ENSO has an important influence on the atmospheric circulation and the weather and climate anomalies in many parts of the world.

In marine meteorological monitoring, the sea surface temperature anomaly in Nino 3.4 area has exceeded 0.5 degrees. It has been 5 months since October 2018. The above 5 data are +0.7, +0.9, +0.8, +0.8 and +0.8. The latest Nino event occurred in the fourth quarter of 2014 to the second quarter of 2016 for five months, which is the longest time since the publication of NOAA data.

Preliminary prediction that the probability of Nino events in 2019 will be greater, but the duration, the extent of impact and the affected areas still need further tracking. We will closely monitor the relevant data and give feedback in time.

2.3 cotton planting intention in China

In 2018, the national cotton planting area was about 45 million 188 thousand mu, an increase of 0.1% over the previous year.

Among them, 37 million 874 thousand mu in Xinjiang area, an increase of 1.6% over the previous year, and a total of 7 million 313 thousand mu in the mainland, a decrease of 11.9% over the previous year.

According to China cotton information network data, as of the beginning of March, in 2019, the national cotton planting area was 44 million 65 thousand mu, down 2.3% compared with 2018.

We believe that the cotton planting area in 2019/20 should be stable or slightly increased, mainly based on the "3. guarantee cotton sugar self-sufficiency level" in the main points of planting work in 2019.

We should improve the supportive policies for cotton and sugar products, promote the concentration of cotton sugar production to the dominant producing areas, encourage large-scale production, and strive to stabilize the cotton area in 50 million mu, and the sugar area is stabilized at about 23 million mu, so as to ensure the necessary level of self-sufficiency.

In the National Bureau of statistics data, in 2018, the national cotton planting area was 50 million 280 thousand mu, an increase of 2 million 360 thousand mu compared with the previous year, an increase of 4.9%.

From a regional perspective, Xinjiang's largest cotton growing area increased by 4 million 110 thousand mu over the previous year, an increase of 12.4%.

In 2018, the output per unit area of cotton in China was 121 kg / mu, an increase of 3.3 kg / mu over the previous year, an increase of 2.8%.

3. cotton market in China

According to the March report of China cotton information network, the total domestic cotton supply in 2018/19 was 12 million 260 thousand tons, of which cotton was initially stored at 4 million 790 thousand tons, output was 5 million 590 thousand tons, and imports were 1 million 880 thousand tons; domestic cotton total demand was 8 million 580 thousand tons, of which 8 million 40 thousand tons of cotton consumption, 500 thousand tons of other consumption, 40 thousand tons of exports, and 3 million 680 thousand tons of final inventory.

3.1 state cotton storage situation

At the beginning of 2019, Pu city believed that the sale of national cotton stores in 2018/19 would start in March as scheduled, but the fact was that the incident did not happen and exceeded market expectations.

The remaining 2 million 500 thousand tons of cotton resources in the reserve cotton market is one of the key concerns of cotton enterprises and investors.

There is a saying in the market that the state may restart the round up reserve cotton policy and purchase imported cotton to replace some of the existing national cotton reserves.

We believe that the national cotton storage policy will be better than the unilateral sale of cotton to supplement domestic supply.

If we turn on the storage window, the state-owned cotton companies in China are more suitable to shoulder the heavy responsibility to complete the national strategic security task and realize their social responsibilities and special values. At the same time, we do not rule out the adoption of the "large single storage channel" measures to ensure the quality and future tracing of the national reserve resources.

3.2 domestic cotton industry business inventories

In February 2019, the growth rate of domestic cotton business inventories was -5.84%, and the situation continued to decline in January. Preliminary analysis of domestic cotton business inventories has entered the 2018/19 inventory stage, and the change data in February is higher than the beginning.

Although the data for March have not yet been released, we think the data should be flat or slightly higher than that in February.

It is worth our investors' rational concern that the domestic cotton business inventories are at the highest level in the past 10 years, and the supply of cotton is stable and sufficient.

3.3 cotton imports in China

According to customs statistics, China imported 230 thousand tons of cotton in February 2019, an increase of 123.6% over the same period last year.

In 2019, 1-2 tons of cotton imported 510 thousand tons, an increase of 115.7% over the same period last year.

In February 2019, the import of China's cotton yarn was about 120 thousand tons, a decrease of 25% compared to the same period, an increase of 30.32% over the same period last year.

In February, the export of China's cotton yarn was about 21 thousand and 300 tons, a decrease of about 45.94%, compared with a decrease of 32.07% over the same period last year.

In 2019 1-2, China's cotton yarn imports totaled about 280 thousand tons, down 2.72% from the same period last year. In the 1-2 month, cotton yarn exports in China were about 60 thousand and 600 tons, down 12.67% from the same period last year.

4. macro money supply and textile consumption orders

4.1 money supply and social financing

In the fourth quarter of 2018, the domestic money supply grew steadily. The supply of M0, M1 and M2 was at the highest level in the past 5 years, and the year-on-year rate of change of the three kinds of money supply was at a low level.

As of February 2019, the supply of M1 and M2 reached a new high in the past 5 years. From the domestic macroeconomic indicators, it is not difficult to find that the current money supply is adequate.

The scale of social financing was stable and upward. In 2018, the figure was 19 trillion and 260 billion yuan, of which the proportion of new RMB loans was always larger than that of new foreign currency loans.

In January 2019 and February, the social and economic data were 4 trillion and 630 billion yuan and 702 billion 900 million yuan respectively. In January 2019, the value of the social economy in the past 5 years was the largest, far exceeding the sum of the fourth quarter of 2018.

4.2 raw material, product inventory and order status

In 2019, 1-2 months, the number of cotton stocks in the cotton mill was about 800 thousand tons, which was the highest in five years. The yarn inventory was about 21 days, the ring ratio changed little, the mean value was higher than that of five years, and the inventory of grey cloth was 30 days.

The structure of cotton resources in industrial inventory, in 2019 1-2, Xinjiang cotton accounted for more than 70%, imported cotton accounted for less than 15%, ring higher than in the fourth quarter of 2018 and showed signs of improvement, but in a lower level in five years.

5.2019 quarter second quarter outlook

5.1 domestic cotton warehouse receipt problem

The annual increase in the number of cotton warehouse receipts (including effective forecasts) in 2018/19 has become normal this year. We have made relevant predictions in the 2019 cotton annual report, that is, the number of Zhengshan cotton warehouse receipts in 2018/19 has increased at least 1 times over the 2017/18 year and is expected to exceed 1 million tons.

As of April 3rd, the number of cotton warehouse receipts (including effective forecasts) was 21145, about 909 thousand and 200 tons, respectively, exceeding the CF1905 contract and CF1909 contract position (Dan Bian), and accounted for about 52.86% of the total +CF1909 contract of the CF1905 contract (Dan Bian) 52.86%. Zheng cotton September contract should undertake the CF1905 contract warehouse receipt pressure.

Comprehensive analysis of various factors, if we can narrow the difference between inside and outside cotton prices, we can increase the cost performance of Xinjiang cotton in disguise, or restart the selling of national cotton stores, so that low price stimulation of Zhengjia cotton high rise water warehouse list and the reduction of base price point price paction may be the way to solve the warehouse receipt problem.

If Zheng cotton's May contract price rises more than 16000 yuan / ton in the short term, it will continue to increase the registration of warehouse receipts. Zheng Mian's September contract will continue to bear pressure.

Promote the CF1909-2001 monthly price difference to continue to shrink (running down the negative range), to ensure the 2019/20 cotton price and to demonstrate the 2018/19 warehouse receipt problem.

5.2 cotton direct subsidy policy in Xinjiang

In March 22nd, we held the annual meeting of the national cotton trading market in Beijing. We organized and analyzed the contents related to the domestic cotton policy reform.

In 2020, the current part of the cotton policy will be automatically terminated. Xinjiang cotton target price direct subsidy policy has effectively solved the original problem of reform in 2014, and the current market mechanism has played an obvious role.

The latest outstanding problems are the deepening of the system, the expansion of policy objectives and the integration of government subsidy resources. In the past three years, the "insurance + futures" pilot projects have been implemented in agricultural products, and cotton varieties are also planned.

How to pfer the government subsidy funds to the market gradually through financial instruments, and the risks and benefits shared by the market participants is one of the meanings of studying how to use the financial derivatives service industry.

In January 2018, the Xinjiang Autonomous Region Government issued the pilot scheme of "price insurance + futures" in the autonomous region in 2018, and decided to launch a pilot project of cotton in 3 counties (cities) to explore new cotton subsidies and the pricing mechanism of cotton market.

In addition, it is learned that Xinjiang's cotton target price reform is one of the important topics of Sino US economic and trade consultations in 2018.

5.3 cotton price difference between inside and outside

In 2018, the cotton price difference between inside and outside was running in the range of -234 to 1632 yuan / ton, and the operation above zero axis was normal, and the average value was 790 yuan / ton in 2018.

This year, the difference between domestic and foreign cotton prices was between 900-2000 yuan / ton, which was higher than that in 2018. In 2018, Sino US economic and trade consultations affected the export of cotton and the purchase of domestic cotton. The change of international trade environment resulted in a decline in cotton prices in 2018.

Statistics of nearly five years, the probability of first convergence and expansion of cotton price in the second quarter is relatively large.