Don'T Let Emotion Drive The Price Trend Of Cotton Market.

Recently, Zheng cotton prices fluctuated more sharply. Within a short span of 3 days, the space of up and down has reached 800 points. Today, the price of cotton has gone straight to the limit. It is not only cotton, but also black, colored and large agricultural products.

For a small number of investors or institutions who like volatility, it may bring unexpected wealth, but for most people, it only means risk.

The current market turmoil has been divorced from the fundamentals, so stop letting sentiment dominate the trend.

The main reason for the mood of the disc must be understood by everyone.

China's cotton market weekly released by the national cotton market monitoring system shows that since the United States began to impose tariffs on China, worries about global trade have increased and the price of international cotton has increased.

On May 2019 6-10, the settlement price of ICE cotton futures contract was 71.54 cents / pound, down 4.77 cents / pound, or 6.25%, compared with last week.

In the same period, the average settlement price of zhengmian futures contract fell to 15338 yuan / ton, down 205 yuan / ton, or 1.32%.

The fall of resonance inside and outside the cotton market has once again proved that it is the law of iron to combine the two advantages and fight all the wounds.

The pessimism of market sentiment has gone beyond the fundamentals.

There are two different voices in WeChat's circle of friends these days, but most of them are also disappointed in the uncertainty of the future.

Based on the analysis of fundamentals, what is the current market supply of cotton?

According to the theory of market equilibrium, the supply of cotton market is indeed sufficient. This is also the main reason why Zheng cotton has maintained its low position for quite some time, and at the same time, the supply curve has shifted to the left.

Of course, due to the limited supply increase, the price of cotton has been relatively stable, and there has been no sharp fall.

Of course, this is conducive to reducing the price difference between the internal and external cotton, after all, the difference between the internal and external cotton prices has been pulled up to 1820 yuan / ton.

Look at the demand level.

Customs data show that in 2019 1-4, the total export volume of textiles and clothing in China was 75 billion 764 million US dollars, down 4.22% from the same period last year.

In particular, the United States raised US $200 billion to 25%, which added to the pessimism of investors.

A more profound effect is that the possibility that the United States will increase tariffs on all the remaining commodities is increasing rapidly. So far, market sentiment has shown that cotton is the most prominent and the biggest drop.

It can be seen that market investors believe that Sino US trade friction is crucial to the textile industry.

Take the Sino US trade frictions in 2017 as an example. According to the relevant data, the export volume of textiles and clothing trade in 1-11 months was US $244 billion 580 million, of which US $41 billion 460 million was exported to the US, accounting for only 16.9%.

Even with all tariffs, the United States could not completely stop importing from China, at most a sharp drop in the proportion.

Therefore, in the future, China's textile industry should not be so pessimistic.

As long as the industry syntheses centripetal force, immerse itself in improving technology, produce quality products, and actively open up trade cooperation with other countries, I think the solution is always more difficult than any other difficulties.