On June 28, after continuous sharp declines, the lowest point of Zheng cotton was finally fixed at 16,505 yuan/ton. Then, affected by market news, it launched a round of rebound. This round of rebound was caused by the reduction of positions, which means short positions. Partial profit exit.
In the past month, Zheng Cotton has fallen by nearly 4,000 points, with most of the decline coming from mid-June. You can imagine how rapidly Zheng Cotton fell, which had a great impact on the industry. Due to the rapid decline, sales of textile raw materials and products have basically been suspended. Because companies are selling at current prices, companies are losing money, so the recovery of industrial consumption is less than expected. Constrained by slow cotton sales and weak downstream consumer demand, pressure on the cotton market still exists. .
This rebound of Zheng cotton cannot be separated from the cooperation of the rise of US cotton. However, on the 29th, US cotton showed signs of weak rise. Relying on the rise of US cotton to drive the rebound of Zheng cotton cannot be sustained for a long time. First, the fundamentals of internal weakness and external strength will continue. The second is that the United States has imposed sanctions on Xinjiang cotton, suppressing demand for Xinjiang cotton and increasing the consumption of foreign cotton. Therefore, compared with Xinjiang cotton, US cotton will continue to maintain a strong position. The market will usher in the Federal Reserve’s interest rate hike meeting in late July. Currently, crude oil remains at a high level and fluctuates. If crude oil prices continue to remain strong, it will be difficult for U.S. inflation data to see a substantial decline. After all, energy has a larger weight among commodities used in U.S. inflation statistics. This could lead to the Federal Reserve raising interest rates significantly. The foundation for U.S. economic recovery is not solid, and the risk of economic recession caused by excessive interest rate increases is also increasing. Once the Fed’s policy fails to achieve a soft landing, global commodities will inevitably begin a new round of correction.
In addition, the European Central Bank also recently held a monetary policy meeting and officially announced the start of the normalization process of the euro area’s monetary policy, which means that the era of negative interest rates in the euro area is about to end. According to the resolution, the European Central Bank will raise interest rates by 25 basis points at the next monetary policy meeting on July 21, and will continue to raise interest rates at the monetary policy meeting in September. However, the extent of the interest rate increase in September will depend on the euro at that time. district inflation. In the context of joint interest rate hikes by the United States and Europe, the uncertainty facing the world economy has increased, and bulk varieties with macro guidance have begun to fall in advance. It is very difficult for cotton to survive alone.
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