After a short period of long and short competition, Zheng Mian fell below the important support level and began to adjust downward. The market always changes inadvertently, especially when the market prediction direction is consistent, you need to be particularly careful.
Strong expectations and weak reality are still at play. At present, domestic Zheng cotton has risen by 3,000 points from its low position. The increase is very considerable. To continue to rise, it needs to digest the early bullish power. The main reasons supporting this round of rise are nothing more than two points. First, the Federal Reserve has entered the late stage of raising interest rates, and the extent and intensity of interest rate increases are slowing down, especially with the forecast that interest rates may be cut at the end of the year. Second, after China’s epidemic prevention and control policies are optimized, the entire economy is back on track. , the market expects a rebound in consumption.
Whether market consumption will really improve in the future still needs to be verified later. It is now expected. The author believes that the market outlook is likely to have the following possible situations: First, market consumption will really improve, and the industry can transmit and digest cotton prices. The reality continues to rise. At present, upstream cotton processing enterprises are highly profitable, and the profit gap between downstream cotton yarn and upstream is relatively large. The profit per ton of cotton yarn is around a few hundred yuan. From a purely profit perspective, the downstream industry will either continue to increase and expand profits, or be squeezed by upstream cotton. At present, It seems that both have some room for adjustment.
A person in charge of a textile enterprise said that the cotton price has risen from a low point to 15,500-16,000 yuan/ton, which is the return of cotton’s normal value. The cotton spinning industry can successfully transmit and accept it. If the cotton price continues to rise to 17,000 yuan/ton and above At a high position, it will become more difficult for the entire industry chain to accept it.
Secondly, when market consumption falls short of expectations, cotton prices may fall and adjust until the industry can accept it. In the final analysis, consumption plays an important role. Without consumption, growth is like a castle in the air that will collapse sooner or later. However, in February, Xinjiang is already preparing to purchase agricultural inputs, which indicates that the new cotton planting year is about to begin. This year’s cotton planting area will become a hot issue for market funds, including the impact of future weather on cotton growth. It may produce certain bullish factors for cotton prices, so the probability of cotton prices remaining volatile is high, and the probability of continued trending market conditions is small. Facing the market, companies should still do a good job in risk control, follow the rhythm of the cotton market, purchase low-price cotton, and win market opportunities.
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