Price Difference And Other Factors Will Cause Cotton Prices To Rebound Slightly

The appreciation trend of the RMB exchange rate has not changed, but the short-term growth rate will be restrained by the strength of the US dollar. On October 13, the central parity rate of USD against RMB in the inter-bank foreign exchange market was at 7.9116, up 29 points from 7.9087 at the end of last week. The continued decline of crude oil prices has eased the inflation pressure in the United States to a considerable extent, and the expectation of the Federal Reserve to stop raising interest rates has also gradually risen in the market. At the same time, the US nonfarm employment data released in early October turned better, the real estate and capital markets performed steadily, the economy grew moderately, and the surrounding exchange rate was relatively weak, so the US dollar also showed short-term strength. Affected by this, the appreciation momentum of the RMB exchange rate was suppressed this week, with a slight correction and horizontal fluctuations along the 7.9 line. As the impact of the RMB exchange rate elasticity will expand has not disappeared, and the trade surplus will continue to grow, the pressure on the RMB exchange rate to appreciate in the medium term still exists. It is expected that the RMB exchange rate will fluctuate in the range of 7.8-7.9 in the later period, but the short-term growth rate will be restrained by the strength of the US dollar. The forward market performance is slightly stronger, and the growth rate of spot pressure is limited. On Wednesday this week, the markets were basically synchronized, the forward market was slightly stronger, and the overall bearish atmosphere was strong. The liquidity risk of Zheng Mian has slightly improved, and the market transactions and positions have increased, but the absolute value is low, which is not enough to drive the bull market. As of October 13, there were 378 warehouse receipts for Zheng Mian (including the effective forecast), an increase of 221 from last week. This week, Zheng Mian held 16827 total positions, an increase of 6272 over the previous week. In the future, spot traders will continue to be restricted from making warehouse receipts by the status of premium and cost of making warehouse receipts. In the short term, the growth rate of spot pressure should be quite limited. The growth rate of total holdings in the futures market is slow, and the market's downward momentum begins to weaken. investment strategy The balance between the internal and external cotton price difference and the price difference of staple fiber substitutes, as well as the lower spot pressure, will provide favorable support for the domestic cotton price. After falling again in the previous period, the driving force of the fall in domestic cotton prices has weakened to a greater extent. The purchase price of seed cotton maintains a slow decline trend, and the rigid gap of demand will promote the price rise in the middle and later stages of the purchase. However, because the appreciation of the RMB will continue to restrain the cotton price rise by affecting the demand of the textile industry, the space for the cotton price rise in the later stages should not be too high. On the whole, the price difference factor will urge the cotton price to stop falling. In the middle and later stage of seed cotton acquisition, the cotton price is expected to rebound slightly. In view of the difficulty in recovering the transaction in the futures market at present, it is advisable to remain on the sidelines in operation.