June'S Gloomy Start: After The Crude Oil Closed Down, Cotton Fell And Cotton Yarn Touched Down.

After the tragic end of May, the global risk assets staged a bleak start in June, and the global risk aversion is still clouded. Sino US relations have become the key changes in the market.

Weekend news hinted that the trade disputes between China and the United States did not come to an end soon. Meanwhile, Global trade tensions intensified and investors worried about the risk of economic recession.

Today, cotton and cotton yarn futures opened up and fell across the board. Zheng cotton main force once again dropped to a new low of nearly three years, closing at 12965 yuan / ton.

The 1909 contract price of zhengmian main force has accumulated over 3000 yuan / ton since mid April.

As we all know, the current external trade situation is tense, and the cotton spot market is pessimistic.

For this Zheng cotton "caught off guard" limit, market participants have the following interpretation:

Green Dahua futures researcher Cui Jiayue believes that the current cotton market is in an obvious weak market. Besides the bad influence of Sino US trade friction, the expectation of basic supply and demand pattern is also pessimistic. In addition, the pressure of the futures market's warehouse receipt has been unprecedentedly huge, which has contributed to the downward trend and even downward trend of the previous market.

For the future trend, under the influence of the current atmosphere, even if there is a rebound, it will be subject to greater restrictions. The depressed market sentiment can not be reversed in a short time.

The specific explanation is as follows: 1, the global risk assets have been sold heavily.

The global market is facing black May, the panic is pervaded, the risk assets are facing large scale sell-off, and the commodity market is gloomy and gloomy. Cotton is a deeply implicated variety in Sino US trade friction. It is easy to imagine that the probability of further decline in the US cotton price will be greater in the future.

2, domestic cotton basic supply exceeds demand is obvious.

At present, the basic situation of cotton in China is very bad.

Supply side: cotton market resources are abundant.

Dumping and storage + social inventory + imports make production enterprises choose room and space larger, and the market is cautious about purchasing.

Demand side: expected by the impact of Sino US trade friction, downstream textile exports are expected to decline, resulting in low demand expectations.

Embodied in: import volume increased year-on-year year-on-year; cotton auction cold, volume and price fell; domestic cotton social stocks remained high in the past 5 years.

3, the futures market pressure continued to increase.

As of May 31, 2019, the Zhengzhou Mercantile Exchange registered 18129 cotton warehouse receipts, a decrease of 462 compared with last week, an effective forecast volume of 943, a decrease of 118 compared with last week, a total of 19072 pieces, a delivery volume of 762 thousand and 900 tons, a real yield of nearly 40%, significantly higher than the previous year's record high.

This brings psychological pressure to the market even more than substantial pressure.

Yan futures, an analyst at Galaxy futures, said that the pressure on exports of the domestic textile and garment industry has increased recently.

The pressure of downstream enterprises is gradually highlighting, gauze inventory increases, and textile enterprises stop production and limit production.

At present, the downstream enterprises are afraid to place orders easily. It is expected that the consumer side will not improve in the short term.

But Zheng cotton fell to the present position, the price is in the low level for nearly three years, and in the long run is also low, and is currently the cotton digestion inventory stage, these factors constitute a support for cotton prices.

It is proposed to wait and see for the time being and pay attention to the trend of cotton futures.

China's cotton network is nonsense. Compared with last week, the cotton market has made some changes, which is probably the reason for triggering the Zheng cotton disk's "sway with each other". First, the expected increase in Sino US trade frictions is escalated, and the United States enters the "countdown" tariff on the import of Chinese $325 billion merchandise.

USTR will issue a notice next week in the federal Gazette to extend the time when certain products from China export to the United States until June 15th, and then the tariffs will increase from 10% to 25%, that is, a 15 day buffer period.

Since June 1, 2019, China has imposed tariffs of 25%, 20% and 10% on the list of imported goods originating in the United States of about US $60 billion (5% duty is added to the commodities that are subject to 5% tariff before added).

Some agencies believe that the white paper on China's position on Sino US economic and trade consultations pointed out that the failure of negotiations was responsible in the United States, and the US side had three times to go back on its side, and China's four major positions were clear.

Therefore, the possibility of short-term negotiations between China and the United States, concessions and agreement is negligible.

Two, last week, the US stock market, bond market and financial market plummeted, and then impacted on the real economy and commodity market, and cotton was not spared.

Similarly, other stock markets in Germany, France and Europe are also "deep green". Today, domestic crude oil, PTA, asphalt, corn, rubber, cotton and other futures varieties should fall, but just like other varieties, cotton has become a "sharp pioneer" under the pressure of supply and demand, fine weather and so on.

(China Securities Network, Green Dahua futures, China cotton net)