At this stage, the spread of the epidemic is intensifying globally. Global financial markets have been hit hard by systemic risks. European and US stocks have fallen across the board. Oil prices have hit a new low for one year. Investors' concerns about the global economy have intensified. Domestically, the current commercial cotton inventory is 5.01 million tons, which is at an all-time high. In addition, traffic control in some areas in Xinjiang is still strict, and shipments outside Xinjiang are blocked. Inventory pressure cannot be ignored.

Downstream textile companies are gradually returning to work, although trading has increased, but it is still small. In addition, the development of foreign epidemics may have an impact on the orders of export-oriented enterprises and suppress the upward movement of domestic cotton prices. Yesterday, the Zhengmian 05 contract opened lower and closed lower. At the end of the session, it closed at 12,625 yuan / ton, down 180 yuan / ton. The MACD green column increased, and the KD line diverged after forming a dead fork, which was technically weak. Positions decreased by 7127 hands to 463,000 hands. Subside. Short-term attention to the 12500 first-line important support below the 05 contract and position changes. Yesterday, the average transaction price of reserve cotton was 13,715 yuan / ton, and the transaction price was 5,560 tons, with a transaction rate of 79.43%.

��market Overview��

[Spread Structure and Arbitrage Analysis]

On February 27, the current price difference between Zheng Cotton 2001 contract and the CCI3128B index period was -698 / ton, which was 372 yuan / ton lower than yesterday.

As of the close of February 27, Zheng Cotton's 2005-2009 contract spread was -465 yuan / ton, the spread remained unchanged from the previous transaction, and there was no obvious arbitrage opportunity in the near future. On February 27, the difference between the CCI index and the FC Index RMB index was 416 yuan / ton, which was an increase of 107 yuan / ton compared with yesterday; the ZCE2005-ICE1912 contract was trading at a price difference of 2517, which was 3 yuan / ton higher than yesterday.

[Warehouse receipt and effective forecast]

As of February 27, Zheng cotton receipts amounted to 36,630 (approximately 1.575 million tons), an increase of 42 (1849 tons) from the previous day, and the effective forecast amount was 5,897 (approximately 254,000 tons), a decrease of 156 from the previous day ( (Approximately 6708 tons); the total amount of warehouse receipts and valid forecasts totaled 1.829 million tons.

��Market analysis��  

Currently the US EMOT M arrives at 76.75 cents / lb, India S-6 1-1 / 8 arrives at 73.1 cents / lb, Brazil M arrives at 76.65 cents / lb, and the arrival price of foreign cotton is higher than the previous one. Japan continued to fall sharply collectively, dropping 0.75 cents per pound. According to the US Department of Agriculture, for the week of 2.14-2.20, the contracted sales of upland cotton in the United States in 2019/20 was 48682 tons, a decrease of 9% compared with the previous week and an average contracted volume of 32% in the past 4 weeks. The shipment of upland cotton was 73501 tons, compared with the previous week's shipment. The shipment volume decreased by 14%, and the average shipment volume decreased by 15% over the past four weeks. Although the US cotton export sales data was not as good as last week, it remained strong. Affected by the systemic risk of epidemic spread, the three major U.S. stock indexes once plummeted by more than 4%, all falling into the callback area; the CRB core commodity index fell to the lowest line of 161.56 in the intraday, the lowest point in nearly four years, and the downward line of 154.85 (2016 Year low).

ICE cotton 05 contract fell for 6 consecutive days, opened lower and closed lower. The Yin Yin closed at 62.47 cents / lb, down 2.91 cents / lb, a decline of more than 4%. MACD green column volume, KD divergence downward, technical indicators have weakened. The price of the 05 contract recently ranged from 59-65 cents / lb.

At this stage, the spread of the epidemic is intensifying globally. Global financial markets have been hit hard by systemic risks. European and US stocks have fallen across the board. Oil prices have hit a new low for one year. Investors' concerns about the global economy have intensified. Domestically, the current commercial cotton inventory is 5.01 million tons, which is at an all-time high. In addition, traffic control in some areas in Xinjiang is still strict, and shipments outside Xinjiang are blocked. Inventory pressure cannot be ignored. Downstream textile companies are gradually returning to work, although trading has increased but is still small.

In addition, the development of foreign epidemics may have an impact on the orders of export-oriented enterprises and restrain the domestic cotton price from rising. Yesterday, the contract of Zhengmian 05 opened lower and closed at the Yin line. Incrementally, the KD line diverged downward after forming a dead fork, which was technically weak; positions decreased by 7127 hands to 463,000 hands, and currently the positions have not substantially subsided. Short-term attention to the 12500 first-line important support below the 05 contract and position changes. Yesterday, the average transaction price of reserve cotton was 13,715 yuan / ton, and the transaction price was 5,560 tons, with a transaction rate of 79.43%.

��technical analysis��  

 Yesterday, Zhengmian 05 contract opened lower and closed the Yin line. At the end of the session, it closed at 12,625 yuan / ton, down 180 yuan / ton. The MACD green column increased, and the KD line diverged downward after forming a dead fork. To 463,000 lots, the current position has not substantially subsided. Pay attention to the important support of 12500 under the 05 contract. The short-term operating range of the 05 contract is 12100-12850; the price difference is -465 yuan / ton.

[Transaction Suggestion]

Zheng Mian 05 contract trend is weak recently. Upstream cotton companies continue to do a good job of inventory risk management; they can wait for the future price to rise and sell in batches. Textile companies already have (virtual inventory) positions can continue to stay in moderation, while adjusting according to actual operating conditions. Basis trading companies speed up the pace of point-of-sale sales every time the basis is stronger. Long-term bottom-selling funds are recommended to stay light, short-term speculative funds are recommended to participate cautiously. (for reference only)