Market Dynamics: Weak Basic Cotton Area In Short Term

Since late March, the price difference between domestic and foreign cotton has been in an inverted range. Affected by the strong demand of American cotton, the large number of non price contracts and the cancellation of import tariff on cotton in India, the price of American cotton has been rising. In contrast, the domestic cotton market has been weakening, and the price of cotton has been suppressed. The pattern of strong external and weak domestic has been gradually formed.

According to the monitoring of Mysteel's agricultural product data, as of May 7, the price difference between domestic and foreign cotton was - 1831 yuan / ton, and there was still a large space for hanging upside down. Under the operation pattern of strong outside and weak inside, the price of American cotton has a strong support for the bottom of domestic cotton price, and the overall operation trend of domestic cotton price basically follows the external plate.

From this round of market, it is not difficult to see that when the US cotton continued to rise, Zheng cotton's rise was relatively limited, with an increase of 0.57% on the first trading day after the festival; When American cotton fell, Zheng cotton's callback rate was greater than its increase, and fell 2.72% on the second trading day after the festival. From the fluctuation range, Zheng Mian is easy to fall but difficult to rise, which is inseparable from the weak domestic fundamentals.

From the supply side, the cotton sales progress of the upstream cotton ginning enterprises in 2021 / 22 is only 40% to 50%, slower than that of the same period, and the commercial inventory is higher than that of the same period. According to the monitoring data of last week, the total cotton inventory of Mysteel increased by 29.29% compared with that of last week. From the demand side, the downstream textile market continued to be weak, superimposed on the impact of prevention and control, weak orders, limited delivery, textile enterprises finished product inventory pressure is quite large. According to the monitoring of Mysteel agricultural products data, as of April 29, the yarn inventory of spinning enterprises in major regions of China was 30.6 days, 0.4 days higher than last week, with a weekly growth rate of 1.3% and a year-on-year increase of 131.8%. At present, the textile market has entered the traditional off-season, and the terminal market has not improved significantly. Some textile and clothing enterprises have less fabric stock in autumn and winter than in the same period. They are pessimistic about the future market. The basic area of short-term cotton is weak, and the current situation is difficult to change. Zheng cotton's rising momentum is insufficient.