External Market Fell Sharply, Zheng Cotton Touched Four Years Low

As foreign epidemics continue to spread, there is a rare fuse in multinational stock markets. On March 12th, the three major U.S. stock indexes suffered a sharp fall after opening day. The standard & Poor's 500 index fell rapidly by more than 7%, triggering market futile mechanisms and halting market trading for 15 minutes. On the same day, the Toronto stock exchange index fell 9.17%, triggering a market disruption and suspending stock trading. Brazil's IBOVESPA stock index dropped 12%, suspended trading for the third time this week, and after the resumption of trading, it fell to 15%, triggering a second day and fourth break this week. Panic in financial markets is increasing.

With the continuous improvement of the epidemic level, the impact of the new crown epidemic on the market has become increasingly fierce. Not only did the stock market show a rare slump, but the commodity market also suffered bloodbath. Last night, ICE cotton main in May fell below 60 cents / pound, quickly brushing the cotton ring. Zheng cotton has touched the limit plate many times after opening today, creating a new low position in the past four years. As of the end of the afternoon, zhengmian 2005 contract closed at 11690 yuan / ton, or 4.02%, and 1446 additional positions. Then, although it was released again, it was basically on the edge of concussion.

Zheng cotton futures prices fell sharply, triggering concerns in the whole cotton industry chain. Some spot trading enterprises thought they could take the opportunity to ship the goods at a low price and wait for the base point price to list. It can backfire. Judging from today's inquiry, the quantity has not increased, and some enterprises have not even received a list. At present, some spot price trading enterprises have buoyancy in the futures market, but they are unable to solve the problem because of the lack of buying, and when the downstream purchasing enthusiasm can resume, it is not yet possible to judge. Therefore, short-term supply side pressure is still increasing.


From the perspective of demand, Japan and South Korea, many European countries and the United States are the main destinations of China's textile and clothing exports, and the epidemic is aggravating, and export orders are expected to be limited. Individual textile enterprises even reflected that not only did the order increase in the near future, but also the situation of returning the contract was found. In the March forecast report of the US Department of agriculture, the consumption forecast data was 7 million 947 thousand tons, down 218 thousand tons from last month, and will also pressure domestic industry's expectations for the future.


Therefore, it is inevitable that cotton prices will go down in the short term, but whether or not it means that the opportunity of bottom hunting has arrived and there are still many uncertainties. After all, the current market leading factor is the development of the epidemic. The development of the global epidemic will play a decisive role in the short term cotton market.