Narrow Range Vibration Becomes The Mainstream Of New Cotton Market

Date:Nov 22, 2019

Once a year, new cotton is coming to market again, but the performance of cotton market is unsatisfactory. When the phenomenon of top and bottom pressure of Zheng cotton is normalized, and cotton market participants who have experienced great pains in the first half of 2019, how to avoid risks and achieve profits in the new year has become the first task that must be done.            

According to statistics, as of November 19, 2019, the national average price of grade 3128 lint (gross weight) is 13289 yuan / ton, the closing price of zhengmian main force 2001 contract is 12835 yuan / ton, and the main basis is 454 yuan / ton. Since October, when new cotton was put on the market in China, the price of lint in China has risen by a limited margin, crawling slowly within the range of 12500-13300 yuan / ton, with a fluctuation of no more than 6.4%.            

On the contrary, in the same period last year, during October November when new cotton was launched, the price of national grade 3128 lint fell from 16300 to 15800 yuan / ton, with a narrow range fluctuating and falling by 3.0%.            

If the time axis is extended, from October 2018 to April 2019, the national average lint price is generally in the range of 15700 yuan / ton. Even the main part of Zheng cotton with high volatility is also in the range of 14800-15500 yuan / ton, the fluctuation range is not more than 4.8%.            

However, from September 2019 to now, the fluctuation range of domestic cotton spot price is no more than 600 yuan / ton.            

In such a small price fluctuation space, many operational profit-making means will be reduced or even disappear. Even in the case of high cost of seed cotton and poor spot sales, the cotton enterprises' hedging effect is not significant. This is also an important reason that this year's cotton market is more difficult to do professionally than not professionally.