Sino US Trade Negotiations Hope To Rekindle Zheng Cotton Rose By More Than 3%.

On the evening of June 18th, the first call of the US dollar said it was expected to release good signals at the G20 meeting, and the market was delighted with the news. Yesterday evening plate, Zheng cotton main contract 909 straight pulled up, and today continued high and volatile trend, up to 13935 yuan / ton, or over 3%, 13815 yuan / ton.

At the same time, today A shares The cotton sector is getting stronger and stronger. Wind statistics show that the cotton sector rose by more than 2%, and Tsuen Ag high tech and new stock shares have closed down, while crown agricultural shares, Long Ping high tech, Wan Xiangdenong, swan shares and Feng Le seed industries have all risen.

Ruida futures It points out that the ICE cotton futures hit a two week high on Monday. Because the US China trade consultation hopes to rekindle, the domestic cotton social inventory is still at a relatively high historical level, and the warehouse is relatively slow. Downstream yarn sales are cold, yarn product inventory is high, and Spin Enterprises take the initiative to reduce production capacity. In recent days, the first exchange call between China and the US dollar has kindled the Sino US trade consultation, hoping to pay attention to the customs hearing of the US in the late period. Based on the uncertainty of Sino US trade negotiations, it is expected that the price fluctuation of Zheng cotton will increase. Technically, the CF1909 contract's short and average moving line index has improved, and KDJ has begun to strengthen, with more technical aspects. Operation suggests short-term wait and see.

Guotai Junan Futures pointed out that after more than a month of confrontation, Sino US economic and trade relations have once again been turned into high-level dialogues and boosted the formation of financial markets. However, due to the learning effect, there is still a substantial agreement basis for the real rebound of the market. It is expected that Zheng cotton will mainly rely on strong shocks, with more than one holding, with a tracking loss of 100 yuan / ton. This week, we are facing a series of important time nodes. We pay close attention to the trend of Sino US trade friction. We are concerned about the US hearing on the tax increase in June 17th, and whether the Chinese and American leaders met at the G20 meeting in June 28th. Concerned about the results of the Fed's Conference on June 20. The cotton price trend of the middle and long term cotton contract of Zheng cotton 1909 still needs to see the trend of Sino US trade friction. If Sino US trade friction is alleviated (the remaining 325 billion dollars will no longer raise taxes), the price of zhengmian futures will reach 14500 yuan / ton or more. Sino US trade friction will not ease in the future, the price may still reach 12000 yuan / ton, but it is difficult to continue to run below 12000 yuan / ton.

CITIC construction investment futures pointed out that emotional rehabilitation is the main cause of Zheng cotton market today, but the fundamentals are still weak. Only a small amount of rigid demand brings goods. Zheng cotton failed to touch up the limit, closed at 13815, added 14532 positions, and the total position was 513 thousand hands. With the reversal of sentiment, the G20 summit became a multi - point hype, leaving short term and Zheng cotton back to the rally. It is not ruled out that in the short term, Zheng cotton is pulling up, and the demand and enquiry of the rigid market replenishment in the spot market increase, but the cotton textile industry maintains the overall downturn. In May, PMI was 34.19, a decrease of 10.66, a new low in the past five years. The demand is not good enough to overlay the abundant supply of cotton reserves and the basic situation is relatively weak. Downstream orders difficult, finished inventory backlog, part of the textile enterprises intend to spend too much of the finished product inventory through more holidays, the basic situation still needs attention. Short term recommendations wait and see.

Overall, the price of cotton will rise in the face of macroeconomic news and short-term market sentiment. However, there is a need for further confirmation that cotton prices will continue to suppress cotton prices and whether the cotton market will have a big reversal. (source card network, Guotai Junan Futures, Ruida futures, CFC agricultural products research)