Source: Jinshi Futures Author: Jinshi Futures
Research report text
1. Market overview
January 19,Zheng MianAfter the CF05 contract dipped, it increased its position and reversed its position. In the afternoon, it traded sideways at a high level, and the daily line formed a positive line with a long lower shadow. The intraday trading volume is enlarged and the open interest is increased. In the end, it closed up 1.54% at 14810 yuan/ton, an increase of 225 yuan/ton.
The confidence in the domestic cotton spinning industry market has improved, and expectations for the market in the next year have been maintained. At present, the Spring Festival is approaching, and the textile industry is gradually on holiday. Pay attention to the actual demand of the downstream after the Spring Festival.
2. Industry news
1、cottonPublic inspection: As of January 18, 2022, the country’s total cotton inspections in 2022 were 4.2904 million tons, an increase of 58,300 tons from the previous day. According to the requirements of the cotton quality inspection system reform plan, cotton processing enterprises processed cotton and conducted notarized inspections. A total of 19,026,340 bales were inspected across the country, a total of 4.2904 million tons, an increase of 58,300 tons from the previous day, and a year-on-year decrease of 15.9%. Among them, the inspection volume in Xinjiang was 18,728,214 bales, a total of 4.2238 million tons, an increase of 57,000 tons from the previous day; the inland inspection volume was 298,126 bales, a total of 66,700 tons.
2. Brazil’s cotton planting is expanding, and its output is expected to increase significantly. According to China Cotton Network, according to the latest report of the US Agricultural Counselor, the Brazilian cotton planting area in 2022/23 will be 1.66 million hectares, and the output will be 13.3 million bales (2.89 million tons), a year-on-year 13% increase. The increase in cotton area is due to favorable weather, higher yields, and a positive outlook for prices and earnings. Brazil’s cotton yield in 2022/23 is expected to increase to 1,744 kg/ha, much higher than the previous season’s 1,539 kg/ha, and close to the record high in 2018/19.
3. Fundamental data chart
4. Analysis and opinions
Macro and Fundamental Analysis:
On the external macro front, the agricultural product market is still worried about the economic recession triggered by the global interest rate hike. The United Nations, the IMF, and the World Bank have all lowered their forecasts for global economic growth this year. Under the influence of factors such as the escalation of the geopolitical situation, major interest rate hikes by the world’s major central banks, insufficient internal economic growth momentum, and the continued spread of the epidemic, economic recession in major economies such as the United States and Europe may be inevitable. European Central Bank officials maintained a hawkish speech and raised interest rates in February The probability of 50BP is too high, and the domestic cotton price outlook may benefit from the domestic demand for textiles and clothing.
ICE cotton jumped more than 3% overnight as investors anticipated a strong recovery in Chinese demand and a weaker dollar boosted positive sentiment in the market.
On the supply side, the domestic production of new cotton is basically determined to be around 6 million tons. At present, Xinjiang cotton processing is still continuing, and the speed of Xinjiang cotton public inspection has been accelerated compared with the previous period. Cotton companies are not motivated to enter the warehouse, but the inventory pressure of ginning factories is still very high, and the market supply pressure still exists; on the demand side, some textile enterprises have a small decline in finished product inventory, and a small amount of raw materials are replenished. However, as the Spring Festival approaches, Some textile enterprises began to gradually enter the holidays, the operating rate dropped slightly, and the orders on the machine were still mainly small and short orders, and the momentum of subsequent raw material procurement weakened.
In terms of inventory, the increase in commercial inventory has restricted cotton prices, and the inventory of finished products in textile enterprises is still high. In terms of substitutes, the price difference between polyester staple and sticky short cotton and its substitutes has been fluctuating recently, and the price difference between polyester staple and polyester staple is still at a slightly higher position, showing a substitution effect. In terms of terminal consumption, high clothing inventory, Xinjiang cotton ban and the transfer of some export production capacity to Southeast Asia all make the market doubtful about the later growth rate.
In general, Zheng Mian is still in an upward channel, and the overall volatility remains strong.
View:It is expected that Zheng cotton will maintain a strong shock in the short term, focusing on downstream orders and Xinjiang cotton processing and public inspection; in the medium and long term, it is expected that the center of gravity will shift downward due to the tightening of monetary policies by major central banks around the world and the suppression of weakening consumption.
focus on:Macroeconomic policies, cotton shipments in Xinjiang, and expansion of downstream orders.
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