Textile Enterprises Continue To Leave A Narrow Range Of Cotton Shocks

Important data:

In January 28, 2019, the contract price of zhengmian 1905 was 15255 yuan / ton, and domestic cotton spot CC Index 3128B reported 15498 yuan / ton.

Cotton yarn 1905 contract closing price of 24365 yuan / ton, CY IndexC32S is 23120 yuan / ton.

ICE US cotton 03 contract closing price 73.80 cents / pound, India cotton MCX 01 contract closing price 20540 rupees / bag.

The total number of cotton warehouse receipts and effective forecasts of No. 1 cotton factory in Zhengshang was 18767, an increase of 210 pieces compared with the previous day.

Recently, the Xinjiang autonomous region development and Reform Commission conducted a special survey on the planting intentions of 453 households in 12 cities (prefecture, city) and 32 survey counties in 2019. The survey results showed that the average sowing area was 50.46 mu in 2019, an increase of 1.86 Mu compared with the actual planting area last year.

Cotton accounts for 44.49% of the estimated sown area per household, up from last year.

The outlook for future market: Sino US trade war, China and the United States suspend each other to impose new tariffs. The two sides' work teams are pressing for consultations and moving towards the abolition of all tariffs. The two sides will hold a new round of trade consultation at the end of the month, and the pessimism of the market will be eased.

As far as China is concerned, the replenishment of cotton textile enterprises before the Spring Festival is basically completed, and enterprises are starting to have a holiday.

In the long run, if the Sino US trade war is resolved smoothly, or the cotton demand will be increased, the cotton price will be raised.

Strategy: in the short term, we take a neutral view of Zheng cotton and guard against the risks of trade war.

Risk points: policy risk, weather risk of main producing country, exchange rate risk and trade war risk.