While other domestic commodities are weak, cotton futures have “outperformed” and started to rise since late March. Specifically, after the end of March, the price of cotton futures main contract 2309 rose steadily, the cumulative increase of more than 10%, the highest intraday hit 15510 yuan/ton, for the new high in nearly half a year.

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Recent cotton futures trend

Zheng Mian is rising again

Continued brush more than a year and a half high

At the same time, the domestic focus on the supply side of good news, Zheng cotton continued to refresh the high. April 28, Zheng cotton main contract closed at 15485 yuan/ton, a daily rise of 1.37%. And the contract once hit 15,510 yuan/ton, more than a year and a half the main price high.

ICE cotton futures rose overnight after the USDA report showed a sharp increase in cotton exports. The ICE July cotton contract rose 2.04 cents, or 2.6 percent, to settle at 78.36 cents a pound.

In the domestic market, the decline of the domestic New Year planting area combined with bad weather in the main cotton producing areas, the supply side of the good news to promote the cotton price center of gravity. However, weather changes and cotton planting and growth still need to be tracked continuously, and it remains to be observed whether the harvest situation can occur in the New Year. Demand, new downstream orders in general, demand concerns limit the trend of cotton prices. China Cotton Association on the national cotton seeding survey progress shows that by the middle of April, this year’s weather factors are not conducive to sowing, the overall sowing progress is slower than last year, planting production reduction is expected to continue to ferment, forming strong support for Zheng cotton price, Zheng cotton price is expected to maintain the short-term shock trend. May Day holiday is approaching, pay attention to the risk of long vacation.

Domestic cotton strength factors

External boost, at the same time the domestic supply support. Zheng Mian maintains a strong trend.

In the view of Founder Medium Futures Research Institute cotton analyst Bloomberg, the recent strength of domestic cotton, mainly related to several factors, one is the March macro risk due to the Federal Reserve expansion short-term relief, market panic subsided; Second, the fundamentals of the domestic cotton industry generally maintain a slow recovery pattern, the fundamentals are better than the previous two years, domestic consumption recovery is faster, combined with this year’s planting area is reduced compared to last year, the market believes that this year’s supply will be reduced; Third, export figures were better than expected, especially in the first quarter, which saw a surge in exports to ASEAN and Africa, which revived market optimism for the future.

Although cotton and cotton yarn prices have risen somewhat recently, the spot end of the market is not as hot as the futures market. It can be seen that after the price of cotton rose to 15300 yuan/ton, the downstream demand was more serious. Affected by the rise of cotton, the price of some varieties of cotton yarn rose, and most remained stable. Through visiting and understanding downstream enterprises, it is found that the current cotton price rises, cotton yarn is a small increase, but the weaving factory is not accepted. Terminal clothing, fabric began to accumulate. If the internal and external demand does not start, the industrial chain from the bottom up, soon cotton yarn will begin to accumulate. If the internal and external demand can not be completely reversed before the end of the year, terminal destocking can not be effectively carried out, it may be a disaster of ‘overproduction’.

From the traditional seasonal perspective, May to July for the seasonal low season, this year also appeared a certain “peak season is not prosperous” situation, the lack of orders is still an important aspect plaguing the downstream, we expect that the cotton price in the situation of no significant recovery of demand is difficult to maintain high, afternoon price is difficult to maintain high, May vigilance cotton oscillations fall.