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Yang Zhijiang: Understanding Cotton Research Logic And Future Market Trend

2019/7/17 22:02:00 8

Cotton Trend

Yang Zhijiang

Fudan University - University of Hong Kong IMBA, senior consultant of hitai finance and economics, has worked in the futures industry for 17 years. Since its beginning, it has been focusing on industrial research, paying more attention to the cotton industry, and has rigorous research framework and analytical logic for the cotton industry.

Hector Finance One Yang: Thank you for accepting today's interview. There is a logical framework for the study of commodities. How do you study the cotton industry?

Yang Zhijiang: my personal understanding of the research framework has a large framework and a small framework. The framework is a macro framework for commodity research, and a small framework is a logical framework for commodity fundamentals. The basic structure of commodity supply and demand is a small framework, including supply, demand, import and export, inventory, policy, climate, industrial research and so on. This framework focuses on building the fundamentals of commodity fundamentals. The framework is deeply researched and meticulously done. Eight month Eighteen Solstice Thirty-one Xinjiang cotton research; Nine month Sixteen Solstice Twenty-seven The India cotton research, which belongs to Japan, belongs to the tracking and verification link of fundamental research.

The logical framework of the fundamentals of commodities will also be discussed later. The framework is the macro framework of commodity research, and here I would like to talk about some feelings.

We put the scope of investment slightly wider, and we will find that goods are only one of the targets of asset allocation. Asset allocation targets can be classified into the following categories: stocks, bonds, commodities and cash. When you look at commodity investment from this perspective, the concern may not only be the fundamentals of commodities, but will focus on a more macro point. This requires the logic of macro framework, that is, defining the macro factors, the middle factors (capital flows), the three fundamentals of commodity and the impact on commodities.

Then, how to define the relationship between the three factors of macro factors, capital flows and commodity fundamentals and their impact on commodity trends? Let me talk about my personal views.

We compare the fluctuation of commodity price to a small boat floating in the ocean. The macroscopic factor is the ocean current. When other factors are calm, the direction of the drift of the small boat (price) follows the direction of the ocean current. We can judge the direction of the ocean current through the perception of the water temperature (the degree of economic heat and cold), so as to judge the direction of the boat (price) following. The calm and calm time on the ocean will lead to a sudden Hurricane (short term capital flow). The hurricane will change the direction of the short term operation of the small boat, but it will not change the long-term trajectory of the boat. The short-term capital flow is in line with the sudden characteristic of the hurricane. Then, what are the main factors that decide the direction of the boat? It should be the engine! The engine (supply and demand fundamentals) determines the final course and heading of a small boat (price). The power of the engine is the imbalance between the supply and demand of the goods. The greater the imbalance between supply and demand of goods, the greater the power of the supply and demand. The greater the power of the engine, the more it will be able to cope with ocean currents and hurricanes, and run in the direction of the engine. The supply and demand of goods are basically balanced, and the engine has no power, and the engine lacks the ability to operate the direction of the small boats (prices), and is vulnerable to the influence of ocean currents (macroscopical factors) and Hurricanes (short-term capital flow factors).

To sum up, ocean currents are macroscopical factors, which affect the price of commodities, and even the price direction of goods when the supply and demand of goods are balanced. There are many macroscopical institutions and big coffee companies, and there are many macro indicators to follow. At the same time, you should learn more about the logic of professional structure and big Maca's macroeconomic analysis. Hurricanes are capital factors, which affect the partial trend of commodity prices, and sometimes even deviate from the fundamentals of commodity prices (such as sudden or unexpected events). This factor is destructive and requires high wind control. Research on the poor mobility of funds and the linkage and correlation of major commodities are important tracking indicators. Positions and positions can reflect some problems. The engine is the basic supply and demand, and the power of the engine is the core factor that affects the price of goods. The fundamental research is to study the supply and demand of commodities. The significance of fundamental research is to accurately judge the degree of imbalance between supply and demand. You find the supply and demand imbalance products from many commodities, then study the supply and demand imbalance products, find out the most imbalanced commodities, and do the job well. It is very good to seize such a variety or opportunity every year.

Hector Finance Two What do you think is the impact of macroeconomy on commodities? Are there any hurricanes in the cotton market now?

Yang Zhijiang: macroeconomic judgment is rather complicated. In this field, many professional institutions and big coffee companies are afraid to do anything. I just follow the daily indicators and data. I put my hand into the water and feel the ocean temperature. I personally think that the water temperature is low. At least, the direction of China's domestic macro-economic impact on commodities is not too much. The impact of macroeconomy on commodity price trend is neutral. This is only my personal view. We should read the macro judgement of professional institutions and big coffee, and then we will have a qualitative analysis of the impact on commodities.

The following are the macroeconomic indicators I followed. Some indicators are optimistic and some are pessimistic. This is the basis for my own qualitative macroeconomic impact on goods. This judgment is of great importance, and we should take careful reference.

Is there a hurricane in the cotton market? I haven't seen it yet. At present, cotton futures trading volume is relatively normal, there has been no turnover of more than one million hands, and there has been no significant increase in positions. This indicates that the recent cotton market has no funds to focus on, there is no short-term capital inflow, that is, the hurricane has not yet blown up in the cotton market. So, when will the cotton market possibly blow up the hurricane in the future? The key lies in whether there are prominent contradictions in the cotton market and whether there are factors that attract capital attention.

 

Hector Finance Three How is the supply and demand of cotton market? That is the power of the engine?

Yang Zhijiang: what is the supply and demand situation of cotton market? This question is too general. I divide the cotton market into three parts: the global market, the Chinese market and the peripheral market (outside China's market). We observe the three markets in the new year respectively. 2019/2020 Annual supply and demand situation.

Briefly summarize the supply and demand pattern of these three markets:

according to USDA (US Department of Agriculture) Two thousand and nineteen year Seven Monthly global supply and demand statistics, global new annual output growth 5.42% (mainly India production increase) Fifty-four Ten thousand tons, that is 9.6% US production increase Seventy-nine Ten thousand tons, that is 19.8% ) consumption growth 2.64% The inventory consumption ratio is 64.71% Much higher than normal years. 2000-2010 Average annual level 50% In the new year, the global supply and demand situation is still relaxed. (see below)

according to USDA (US Department of Agriculture) Two thousand and nineteen year Seven Monthly statistics, inventory consumption ratio of China in the new year 81.28% Much higher than normal years. 2000-2010 Average annual level 47% China's supply and demand situation is also very loose in the new year. Because USDA There is a big difference between China's new year end inventory forecast and domestic authority's prediction. USDA Forecast new year end inventory in China Seven hundred and eighteen China cotton information network predicts domestic end inventory Four hundred and forty-nine 10 million tons, the difference between the two new year end inventory Two hundred and sixty-nine Ten thousand tons, resulting in a big divergence between the two countries in terms of domestic sink ratio and supply and demand situation. USDA As a trend change of balance sheet, absolute data are more widely used in China's cotton information network. According to China Cotton Information Network Two thousand and nineteen year Seven Monthly statistics, China's new annual library to consumption ratio 54.36% Slightly higher than normal years. 2000-2010 Average annual level 47% According to this caliber, the domestic supply and demand situation in the new year is slightly relaxed. One hundred and fifty 000 tons, the effective supply of inventory and consumption ratio of the whole society. 36.20% National Reserve rotation or acquisition of state reserves continue to increase, resulting in a further reduction in effective supply, which may lead to short-term imbalance in domestic supply and demand. (see below)

according to USDA (US Department of Agriculture) Two thousand and nineteen year Seven Monthly statistics, consumption ratio of the new year in the peripheral market 56.61% Slightly higher than normal years. 2000-2010 Average annual level 53% The supply and demand situation of the external market in the new year is slightly loose. The new year's external market output, consumption and ending inventory reached the highest point in history, China's imports Two hundred and twenty-eight In the case of ten thousand tons, there is still excess stock in the external market. Eighty-two In the new year, the final inventory and warehouse to consumption ratio of the external market is still increasing. (see below)

To sum up, the global supply and demand pattern in the new year is slightly loose, and the domestic market is slightly better than the external market. The domestic market variables lie in whether the national reserve is to turn round the treasury or increase the stock of national reserves. The variables in the peripheral market lie in the over optimistic outlook for the US and India's output growth expectations, which may be corrected. To sum up, USDA Statistics show that the momentum of the global cotton market is not very strong, and the contradiction between supply and demand of cotton is not particularly prominent. If there are contradictions, it will be mainly seen in China's domestic policies and the United States. / Output changes in India.

Speaking of this variable, Xinjiang's new annual output also has variables. 019 year Five In the middle of the month, when he was in the middle of the sprouting season, He Qiao finance and economics organization went to Xinjiang to investigate. The southern Xinjiang was seriously affected by continuous rainfall. Ten In the southern part of Xinjiang, cotton farmers in southern Xinjiang considered that the rate of reduction was. 20% The above is even greater. Six In the middle of the month, another research group went to Xinjiang to investigate. The feedback is that the buds are not enough, and the sticks are more than the same period last year. 10% Above; Eight month Eighteen Solstice Thirty-one On the day of Xinjiang cotton boll opening period, He Qiao finance and economics once again organized the Xinjiang cotton research team, and once again went to Xinjiang to understand the output situation when the output was fixed, and there should be a clear conclusion on how much the output should be increased or reduced.

In addition, India is the biggest variable in the global cotton market. We wonder whether India's per unit area output or output will change. Nine month Sixteen Solstice Twenty-seven On the day of the Heqiao finance organization India cotton research, it is also to see the output of India, the bottom of my heart. Cotton production in the United States, Xinjiang and India cotton research time is relatively close, India cotton research back, and then go to the United States to investigate cotton production, time is too late, this year can not go to the US research; past years Eight Month to Ten June is the high incidence of hurricanes in the Gulf of Mexico. Two thousand and eighteen This time of year was caused by successive hurricanes that led to cotton damage in Texas. Texas was similar to China's Xinjiang. Texas cotton planting area accounted for the proportion of the United States. 50% Above, focus on Texas situation. We pay more attention to Eight Month to Ten The weather conditions in the Gulf of Mexico in the month, especially the impact of that period on the cotton growing area in Texas.

Hector Finance Four : Two thousand and nineteen year Four After the middle of June, zhengcotton futures and foreign cotton futures prices have undergone a substantial adjustment. ICE Cotton prices have been adjusted more widely. What are the reasons?

Yang Zhijiang: Four Mid month ( Four point one five ) to Six The first ten days of the month ( Six point one zero Domestic cotton main contract CF909 Futures prices appear 20% Downward adjustment of amplitude ( 16100-12720 The adjustment is divided into two stages. Four Mid month to Five month Ten Before the day, the biggest adjustment range. 6.5% (16100-15040) ; Five month Ten After that, it accelerated downward and adjusted downward. 16.5% (15240-12720) The Sino US trade war results in a sharp increase in cotton prices.

Five month Ten The downward adjustment of cotton prices before the day was mainly due to the market competition after the first quarter of textile and apparel exports. Five month Ten Whether or not the day is Two thousand US $100 million levy on US export commodities 15% The tariff is uncertain, causing the order to be postponed. Meanwhile, the stock of finished product yarn of spinning mill begins to increase, and the inventory of finished product grey fabric starts to increase, and raw material purchase begins to slow down. Five month Ten The sharp downward adjustment after the day is mainly due to the escalation of Sino US trade war and the US government's export to China. Two thousand The introduction of tariff measures for us $100 million began. 15% Tariff to 25% And it is also facing another. Three thousand Billion dollar commodity levy 25% The uncertainty of tariffs has frustrated export market confidence on Monday. Five month Thirteen After the opening, domestic cotton futures prices were regulated at a low level and continued to decline, while spot prices fell with futures prices and widened spreads.

Hector Finance Five : Two thousand and nineteen year Six month Twenty-eight Osaka, Japan G20 After the meeting, the US side did not. Three thousand Billion dollar commodity levy 25% Tariffs, trade issues between China and the United States eased, and market optimism expectations began to emerge. What do you think the easing of Sino US trade war will affect cotton prices?

Yang Zhijiang: Six month Twenty-eight Japan, Osaka, Japan G20 Meeting, China and the United States have temporarily reached the right. Three thousand $10 million for goods to suspend tax increases 25% The intention is to restart negotiations, but the latter may still impose tariffs again: the bottom line of China's negotiations is that Two thousand and five hundred Billion plus sign 25% Tariffs have not yet been abolished; high-tech companies in the US can still sell products to China, but without prejudice to the national security of the United States. The meeting of the leaders of Osaka only started the resumption of the thirteenth round of Sino US trade negotiations, and did not reach a definitive agreement. Therefore, this time, the Osaka G20 After the meeting, the Sino US trade war has only temporarily eased. There is still much uncertainty in the future. There is no definite agreement between the two sides. Will the US government repeat the tariff issue on various excuses?

The trade war between China and the United States eased, and domestic cotton futures prices rose impulsing. Seven month One The opening of the day (Monday) will be closed after the opening. Seven In the middle of the month, the price of zhengmian futures has been close to the low point. This is a rational response of cotton prices to the easing of Sino US trade war, that is, the Sino US trade war is merely easing up, and no substantive agreement has been reached. There is still much uncertainty about the future tariff increase. The situation of the high yield of the finished products in the domestic textile mill has not been solved, and the order has not yet been restored.

ICE Cotton prices even went down to a low level, which is related to the new cotton production growth and the export market gloomy. End Six month Twenty-four Cotton planting progress in the new year 96% Five year average planting progress level 98% Cut-off Seven month Eight The growth rate of American cotton was lower than that of the five year average, but far higher. Two thousand and eighteen The cotton planting area decreased in the new cotton market in the new year. 2.7% But the growth rate is normal and the yield is reduced, and the expected output increases year after year. 20% The Sino US trade war has not yet reached an agreement. 25% Though Seven month Four Day of the week (No. 1) Forty-nine Week) 2018/2019 Annual signing rate of US cotton is as high as 112% It exceeded the expected export target, but the weekly contract volume decreased significantly. Two thousand two hundred and sixty-eight Ton, cancel Pima cotton. Four hundred and ninety-nine Tons, signing the new year ( 2019/2020 The number of upland cotton also decreased significantly compared with last week. If the Sino US trade war can not be finally eased, China's cancellation of orders will continue. The US cotton new year's trade orders to China will not grow, losing the first export market of the United States and cotton. The more cotton can be digested by other export markets such as Vietnam, India, Turkey and Pakistan. The Sino US trade war also affects us cotton prices.

To sum up, the trade war between China and the United States has been eased, but it is far from over. The two sides have not reached a substantive agreement, and the US government has the possibility of provoking trade war at any time. Under such circumstances, China's domestic long dated orders for US exports have not increased. 25% Tariffs will not be abolished. The US cotton exports to China are not competitive, and the impact of trade war on the Sino US cotton market is empty. If China and the United States stop fighting, China will cancel the US cotton export to China. 25% Tariffs, and the Chinese government will probably buy and store imported cotton, and the US cotton will take the approximate rate as the target of collecting and storing. This is a variable in the Sino US cotton market, and the market is also looking forward to achieving this result.

Hector Finance Six What is the impact of the US market on China's textile and garment export market?

Yang Zhijiang: the US market is the first or second largest market of China's textile and garment export market, and contributes to China's main surplus.

Let's take a look at the total volume of import and export trade and the difference between China and foreign countries. Two thousand and eighteen Total value of China's foreign trade and imports Four point six two Trillions of dollars, growth 12.6% To create a new historical high; export Two point four eight Trillions of dollars, growth 9.9% Export growth Two thousand and eleven New high since 2000; import Two point one four Trillions of dollars, growth 15.8% First breakthrough Two Trillions of dollars; trade surplus. Three thousand five hundred and seventeen point six Billion dollars, narrowed 16.2% ( Two thousand and seventeen Annual surplus Four thousand one hundred and ninety-six point six Million dollars) Two thousand and thirteen The lowest year.

Let's take a look at the import and export volume and balance of Chinese textiles and clothing. Two thousand and eighteen China's textile and apparel sales Two thousand Billion dollars, imports Two hundred and sixty-two Billion export Two thousand seven hundred and sixty-seven Textile and garment industry contributes $100 million 2767-262=2505 Billion dollars; Two thousand and eighteen The contribution rate of the textile and garment industry to the domestic foreign exchange surplus was 2505/3500=71%

Finally, let us take a look at the contribution of the United States to the import and export volume and balance of China's textiles and clothing. Two thousand and eighteen Exports of textiles and clothing in China Two thousand seven hundred and sixty-seven Billion dollars, of which US market share 17% That is to say Four hundred and seventy Imports of American textiles and garments Ten Million dollars. Two thousand and eighteen U.S. textile and apparel industry contributed to China's surplus in 2000 470-10=460 Billion dollars; Two thousand and eighteen Contribution of US textile and garment industry in /2018 Total surplus in China =460/3500=13% , Two thousand and eighteen Contribution of US textile and garment industry in /2018 The difference between China's textile and garment industry in 2009 =460/2505=18.4% 。 The contribution of the US textile and garment industry to China's trade surplus is evident.

To sum up, the textile and garment export industry has contributed most of China's domestic surplus, and the US market has contributed a considerable portion of this surplus. The US market is very important for China's textile and garment export market and China's balance of payments.

We talk about the impact of Sino US trade negotiation process on China's textile and clothing exports. The first batch of duties was added. Two thousand and eighteen year Six month Fifteen Daily announcement Three hundred and forty Million dollar list added 25% Customs duties Seven month Seven The day came into effect, almost excluding textiles and clothing; the second batch imposed tariffs. Two thousand and eighteen year Six month Fifteen Daily announcement One hundred and sixty Million dollar list added 25% Customs duties Eight month Twenty-three The day came into effect, almost excluding textiles and clothing; the third batch of additional tariffs. 10% , Two thousand and eighteen year Nine month Seventeen Daily announcement Two thousand Million dollar list added 10% Customs duties Nine month Twenty-four The day comes into effect, involving six categories of commodities, such as Electromechanical, light industry, textile and clothing, resources and chemical industry, agricultural products and medicines, and the third batch of additional tariffs. 15% , Two thousand and nineteen year Five month Ten Noon Twelve Points (Beijing time) for the third batch Two thousand $100 million commodity list added 15% Tariff to 25%

The third batch Two thousand Million dollar list of commodities Two thousand and eighteen China's exports to the United States Ninety The Sino US trade war has developed to the second stage. Two thousand Million dollar levy 25% Tariffs), but the list includes textile and clothing items, which do not include all items of textiles and clothing. Two thousand and eighteen Total value of textiles and clothing exported to the United States in China Four hundred and seventy US $100 million, if Sino US trade war develops towards the third stage. Three thousand Million dollar levy 25% Tariff) 470-90=380 US $100 million will affect the export of American textile and clothing products. This is also why textile and clothing related raw materials (cotton, PTA The reason for such a sensitivity to the Sino US trade negotiation process is that the downstream products affected are mainly here. Three thousand Billion dollars.

Hector Finance Seven The international market and the fundamentals of cotton are very complicated. What is your judgement on the long-term trend of cotton prices?

Yang Zhijiang: the cotton price trend is divided into two stages, that is, the medium-term trend and long-term trend.

Judging cotton price trend in the medium term, we should focus on the following aspects: One Industrial factors: whether the inventory of finished product yarn is beginning to decline, and whether the inventory of finished product grey fabric has begun to decline; Two Order status: whether the export orders of the suppressing downstream textile and garment industry have been restored, whether the export scale has started to grow in large scale, or whether the domestic market has made up for the impact of export decline; Three Trade war process: can the Sino US trade war reach a definitive agreement in the medium term? Three thousand The US $100 million product must be confirmed, whether the tariff is added or not. When the hammer hits the ground, cotton price can go out of the trend of independence. Otherwise, the trade war will ease up, and the market will continue to adjust downward.

There are several key points in the long term trend. One Sino US trade negotiations; Two Weather and yield in the northern hemisphere during the harvest season. Three Whether the national cotton rotation is activated or started?

Hector Finance Eight Cotton Traders and manufacturers, do you know how they view the future trend of domestic cotton prices?

Yang Zhijiang: what exactly do they have in mind? I really don't know. I can only share with you what I see or understand.

Domestic traders are basically trading at the base point price, and there is little trend in the market of naked position gambling. Traders basically earn relatively stable returns through the basis of change. Generally speaking, traders do not bet on the trend of trade wars between China and the United States. Domestic production enterprises (spinning mills and weaving factories) are more concerned about the order situation, with orders for production of raw materials, no orders to stop or reduce operating rates, and will not produce big road goods to bet on future prices.

The general mentality of traders and enterprises is that the Sino US trade war has not yet made clear results, the order is insufficient, raw material procurement is relatively prudent, and there is no impulse to hoard the stock market. Therefore, raw material inventory presents a general decline.

Hector Finance Nine Before, we are more concerned about the impact of the supply side of the national cotton reserves, and this time the domestic demand side has a greater impact on cotton prices. Considering the long-term nature of Sino US trade friction, will the long-term trend of cotton prices change?

Yang Zhijiang: the medium and long term price trend is related to the pattern of supply and demand. The supply and demand pattern is composed of supply and demand, according to the previous expectation. 2019/2020 There is still a big gap in the world in the year, and the world will continue to go to stock quickly. Therefore, the market has a long-term expectation of cotton prices. USDA ( Two thousand and nineteen point zero seven Statistical data, 2019/2020 Annual global oversupply and demand Thirty-three 000 tons, in addition to China's leading global inventory, the external market output, consumption, ending inventory has created the highest level of history, the external market inventory consumption ratio rose again. Therefore, the optimistic forecast of previous cotton prices will be corrected under the global supply and demand situation in the new year.

The main reason for the expected adjustment is that 2019/2020 Annual global output growth exceeds expectations (global increase) One hundred and forty Ten thousand tons, that is 5.42% India's increase in production. Fifty-four Ten thousand tons, that is 9.6% US production increase Seventy-nine Ten thousand tons, that is 19.8% However, global demand is facing greater uncertainty or slower growth in demand in the two major economies. These changes have led to a revision of the global balance table.

Everything has two sides. The expected changes in the global balance sheet will correct the optimistic expectations before, which will be reflected in cotton prices. The domestic textile industry chain will continue to inventory, and it will be a driving force for cotton prices when the expected change is replenishment. 2018/2019 Annual national cotton reserves plan to sell One hundred 000 tons, the remaining national cotton reserves One hundred and fifty About 10000 tons, the remaining national cotton reserves continue to decline to the market is more than; the decline of State Cotton stores means that the possibility of future round of storage is increasing, and now the dumping factor will be turned into the expected future. As a result, the market is concerned about the impact of the expected change of demand side on price. At a certain stage, the factors of market concern are bound to shift to the supply side factors, because the two trends that determine the price trend are supply and demand, and a feedback from the price will be transferred to another side. When the textile industry chain is basically finished and the market focus shifts to the supply side, the trade friction has been completely reflected to the low price of cotton price is the opportunity.

Hector Finance Ten : 2019/2020 What is the cotton planting area in Xinjiang in the year? How much is the cost of planting?

Yang Zhijiang: according to the national cotton monitoring system on the domestic cotton sowing area nationwide survey, the sample involved Fifteen Provinces (self)

District) Fifty A cotton planting county (city, regiment). One thousand eight hundred and ninety-five A fixed point cotton planting information link. The survey shows that Two thousand and nineteen Annual cotton sown area in China Four thousand seven hundred and ninety-four point three Million mu, year-on-year reduction Thirty point eight Mu, decrease 0.6% 。 The specific circumstances are as follows:

Domestic cotton planting costs, the adoption of Two thousand and eighteen Annual planting cost data, let's make a reference, see the table below.

According to the above data, the planting cost is: machine picked cotton. 1600-1900 element / Hand picked cotton 1800-2300 element / Per mu; per unit yield of seed cotton. Three hundred and fifty Kg. / For mu, the cost of cotton seed cotton production is reduced. 4.57-5.43 element / Cost of hand picking cotton seed and cotton 5.14-6.57 element / Kg. Snap water mixture 14% Lint 40% Processing fee Eight hundred element / The cotton seed price is calculated in terms of tons. 1.6-2.1 element / In kilograms, the cost interval of cotton picking linen is higher. 11000-14200 element / Between tons, hand picked cotton lint costs range. 12700-17600 element / Between tons. 

Hector Finance Eleven : 2019/2020 How about the cotton planting area and unit production per year in the United States?

Yang Zhijiang: according to USDA (US Department of Agriculture) Two thousand and nineteen year Six End of the month reporting area. 2019/2020 Annual cotton planting area in the United States One thousand three hundred and seventy-two Million acres (equivalent) Eight thousand three hundred and twenty-eight Million mu, less than last year 2.7%% The area of Upland Cotton One thousand three hundred and forty-four point five Million acres (equivalent) Eight thousand one hundred and sixty-one Million mu, less than last year 2.9% Pima cotton Twenty-seven point five Million acres ( One hundred and sixty-seven Million mu, an increase over the previous year 9.9% 。 Details are as follows:

Average yield per lint cotton in China One hundred and twenty Kg. / The average lint yield per mu in Xinjiang is 100%. One hundred and thirty-six Kg. / The average yield per lint in the United States is about 1/2 of the average lint per unit in China. Sixty-two Kg. / The level of mu.

Hector Finance Twelve : 2019/2020 How about cotton planting area and unit production per year in India?

Yang Zhijiang: cotton sowing time in India is longer. Four At the end of the month, the northern area began to sow, and the sowing date lasted for a long time. Eight Month. According to the statistics of India's agricultural sector, Two thousand and nineteen year Seven month Eleven India new flower planting area Seven hundred and seventy-seven 000 hectares (equivalent) Eleven thousand six hundred and fifty-five Million mu, an increase over last week. Three hundred and eighteen Million hectares ( Four thousand seven hundred and seventy 000 mu, the specific data are as follows:

In recent years, cotton planting area in India is generally One point seven The main cotton growing areas in India are Gujarat and Maharashtra. The two countries directly share the proportion of cotton planting area in India. 50% About two weeks later, cotton growing area increased rapidly.

near Ten Average per unit yield of lint cotton in India over the past year Thirty-four Kg. / About 1/4 mu or so, the average yield of Xinjiang lint is over that of India. Thirty-six Kg. / Mu is a high yield level, and its yield per unit level has great potential, but it is difficult and difficult to improve. He Qiao finance and Economics Two thousand and nineteen year Nine month 16-27 India cotton survey also needs to focus on the potential growth potential of India cotton per unit area.

Hector Finance Thirteen Sino US cotton production per unit area and cost vary greatly. What do you think will be the future price of cotton between China and the United States?

Yang Zhijiang: personally, I believe that the price of Zheng cotton and the price of American cotton will be larger in the future.

2019/2020 The annual rate of domestic output declined, and the market expected demand was unchanged from the previous year. Eight hundred and twenty-six Under the expectation of supply and demand, domestic stocks will still go to stock, but the inventory consumption ratio is still at a slightly higher level. 2017/2018 Near the annual level ( Eight hundred and eighty 10000 tons, an increase year on year 6.5% Then, the domestic gap will increase, and the ratio of sink to consumption will be slightly lower, which is a tight equilibrium state, and the cotton price will have a great upward trend. Therefore, 2019/2020 Domestic demand is still the main factor affecting domestic cotton prices in the year. At the same time, state purchasing and storage may also stimulate cotton prices, because storage can be understood as inventory demand, which will change supply and demand in the annual range.

New cotton sown area decreased 2.7% However, due to the expected normal growth and declining yield, the US cotton yield increased year by year, and the US cotton production increased. 2019/2020 Annual output expected growth 20% to Four hundred and eighty Million tons, US cotton exports remain Three hundred and seventy Ten thousand tonnes, US stocks remaining at the end of the year. One hundred and forty-six Ten thousand tons. Sino US trade war results in the addition of Hua Mei quilts 25% The import tariffs, the US cotton exports to China have basically stopped, the US cotton needs to find new export markets; the main export markets of the United States and cotton, Vietnam, Indonesia, India, Turkey and Pakistan can not digest the vacancy market in China yet; 2019/2020 The annual supply and demand pattern is weaker than domestic.

To sum up, the United States cotton in 2019/2020 The annual approximate rate will be weaker than that of the domestic market. The acquisition of national cotton reserves is expected in China. The US cotton trade is seriously impeded by the Sino US trade war on exports to China. The family needs to pay attention to the possible differentiation of the two markets.

Hector Finance Fourteen : Two thousand and nineteen year Four In January, the country went down again. Eighty How much do you think of cotton import quota?

Yang Zhijiang: Two thousand and five year Five At the beginning of the month, the Chinese government imposed a sliding tax policy on the import of super quota cotton, that is, the levy on imported cotton. 5-40% The import tariff is a combination of quantity tax and ad valorem tax. When the price of imported cotton is lower than the base price, a relatively higher ad valorem tax is applied. When the price of imported cotton is lower than the base price, it applies to relatively low volume tax, and the sliding rate is actually a tax rate adjustment.

Two thousand and eighteen year Six month Twelve On the day, the state issued Eighty Ten thousand tons of tax quota. Two thousand and nineteen year Four month Twelve On the day, the state issued Eighty Million tons of quasi tax quotas. The use of quasi tax quotas is related to the difference of cotton prices between inside and outside. The domestic cotton price index has basically been maintained in recent years. 14000-14300 Scope, import M The cotton price index is maintained at 76-80 Cent / Pounds, imports M Class equivalent people's price 11500-12200 Apply to 9.4-12% The level of tax rate is sliding, and the cotton price difference between inside and outside is basically flat or upside down.

Hector Finance Fifteen How are the industrial and industrial stocks in the textile industry chain?

Yang Zhijiang: China Cotton Association cotton logistics branch to the whole country Eighteen Provinces and municipalities One hundred and sixty-four The survey data of cotton delivery and supervision warehouses, social warehouses, bonded area warehouses and processing enterprises warehouse showed that: Six At the end of the month, the total cotton business inventory in China was about Three hundred and thirty-three point nine two 10000 tons, less than last month. Eighteen point eight nine 000 tons, narrower than the ring Seven point seven nine Million tons, still higher than last year One hundred and eight point one eight Xinjiang warehouse business inventories Two hundred and twenty point one seven 000 tons, less than the ring Twenty-six point eight five 000 tons, higher than last year One hundred and five point two seven Ten thousand tons.

Xinjiang's cotton output accounts for the proportion of cotton output in the whole country. 85% Above, Xinjiang's current spindle number One thousand and eight hundred Million yuan, expected annual consumption of cotton One hundred and thirty The consumption of cotton in Xinjiang is relatively fixed. The cotton business inventory in Xinjiang increased year by year, and the amount of cotton consumption in the territory was relatively fixed, because the consumption of cotton in the mainland decreased. Xinjiang cotton has a significant decrease in output, which also confirms the fact that cotton consumption is decreasing.

The change of commercial inventory has obvious seasonal characteristics: the whole warehouse in the warehouse is relatively stable in the whole year. 10-1 Month, month by month growth. One After the month reached its peak, with the increase of Xinjiang, the cotton in Xinjiang decreased month by month. Nine Cotton warehouse inventories in Xinjiang reached a low point in June.

In order to avoid the impact of seasonal characteristics of commercial inventory, observing the year-on-year data of commercial inventories can reflect the level of inventory pressure. Nearly two cotton annual business inventories in the same period, a clear reflection. 2018/2019 The fact that business inventories continue to increase year by year and consumption is sluggish.

2018/2019 Annual cotton industrial stock (raw material inventory) from textile enterprises Two thousand and nineteen year Five The month began to decrease significantly compared with the previous year, and cotton prices also rose. Five The month began to fall sharply, and the correlation between cotton prices and raw material inventory changes of textile enterprises was relatively large.

2018/2019 Annual yarn mill finished product (yarn) inventory Two thousand and nineteen year Three The month began to grow. Six Inventory fell slightly in July, but it is still near the highest level in nearly three years. Cotton mill finished product (yarn) inventory remains high, there is no incentive to actively purchase industrial stocks (cotton), then hope that the demand for replenishment of cotton prices will be temporarily lost.

2018/2019 The inventory of finished products (grey cloth) in the annual weaving mill is also self. Two thousand and nineteen year Three The month began to grow. Six Stocks continued to grow slightly in August, reaching the highest level in nearly three years. The finished product (grey cloth) of the weaving mill is so high that there is no power to actively purchase the industrial stock (yarn), and there is little hope for the cotton mill to produce the finished product inventory. Without the finished products of the cotton mill to go stock, there will be no hope for its industrial Inventory (cotton) replenishment. This interlocking inventory process requires the removal of finished products (grey cloth) from the downstream mills to begin with the demand for replenishment of cotton.

To sum up, it is very important to observe and master the finished product (grey cloth) storehouse in the downstream weaving mill; grasp the key data of the downstream fabric to remove inventory, and the rising price demand caused by the replenishment of cotton needs to have a basis.

Hector Finance Sixteen Since last year, cotton research suddenly seems to be on fire, and cotton research in Xinjiang is going on in waves. Some people say that Xinjiang is so big, and how to look at it is one-sided. What do you think of this view?

Yang Zhijiang: Fu Haitang Fu teacher has a famous saying: " Opportunities for commodities are in the field, and opportunities lie in factories and mines. " I agree with you very much. Agricultural products do not go to the field of research, to do industrial products do not go to the mining enterprises to see, to stay in the office to see some data is no future. Looking at the analysis report, if we want to invest well, we may have a chance in the short term. In the long run, it is not very likely to make big money. Through research, we can understand the details of the industry, and are less affected by emotions. Because you are exposed to first-hand information, I personally agree with Professor Fu's viewpoint and want to do well in investment research.

Hector Finance Seventeen From your experience, how can we do a good job in the research of commodity industry?

Yang Zhijiang: personal experience should be considered in several aspects.

First of all, to maintain the independence of thought, the idea of ideological independence means not to echo others' opinions, and stick to their own views according to their own research logic and judgement. You think you have a comprehensive grasp of the market and your logic is right. Then you must maintain your independence. Inside the market Ninety-nine It's often wrong for a person to say one direction. You may be wrong if you are different from other people's voice. Maintaining independence is very important, but it is very stressful.

The second aspect is to study logic rather than conclusion. Because the conclusion is based on certain premises, the conclusion is not right or wrong, the conclusion is only the result, because under that premise, there must be such a result. Your logic is so sure that it will come to the conclusion that there is only a reasonable or unreasonable condition for your hypothesis. Logic is a question of level. If we have strict logic, we should learn more. Research should emphasize logic instead of conclusion.

On the third hand, research is a dynamic process. Conclusion should have strict logic, but the market is changing. The premise that you assume the premise and logic produce the conclusion may change. Research should always pay attention to these assumptions, dynamic tracking, the premise changes, the conclusion is dynamically adjusted, and it is a necessary quality to see these conclusions in a dynamic way, or we must do research according to this requirement.

It is very important to maintain independence and maintain independence, but it is also very difficult. To maintain independence, we should appropriately reduce communication and do not communicate frequently. Because people are easily influenced by others, you think you are right or your logic is no problem. You must remain independent and not too much influenced by others. You can sit in, but do not pay too much attention to it. This is the question of independence; and the other is to be a researcher.

Hector Finance Twenty Thank you for general manager Yang's interview today. Last question, what do you think is the difference between research and firm trading?

Yang Zhijiang: research is an audience, a firm offer is a solid job; research is looking up the road and making a firm offer. According to the conclusion, the research is derived. A Point to B Point, A Point to B The point is a straight line. If goods are in short supply, they will rise. If the supply exceeds demand, they will fall, and the derivation process is linear. But in fact, the price is not straight, and the fluctuation is very large. The study concluded from the long cycle that the conclusion is correct. The conclusion is that the price will rise in the future period. It is indeed rising, but the actual operation process in the middle does not necessarily make money. Because the middle process is tortuous, many studies fail to transform the real market and succeed in the process, because it is very difficult to see the unity of knowledge and practice, but it is not always possible to make money, because the research is linear, but the actual route is very tortuous.

The other is mentality. Since knowing that the process is tortuous and the direction is right, there will be a lot of suffering in the process of holding, and the mindset is very important. If we can achieve unity of knowing and doing, have certain technology and strong heart, we will be able to succeed in transformation. It is the dream of every researcher and the need to pay a lot to study the successful transformation of the firm.
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