December 2017 inside and outside the cotton market can be described as "ice and fire two days" , American cotton main contract in March after standing at 70 cents/pound integer level, all the way high into the early point of 80 cents/pound line. 

But Zheng Mian main force from 15500 Yuan/ton a line fall, once under 15,000 pass, the recent narrow amplitude Oscillation, dilemma. U.S. cotton exports are strong. According to statistics, as of December 28,2017, the United States has signed contracts to export 2.552 million tons of cotton in 2017/18, accounting for 78 percent of the annual export volume, higher than the five-year average of 11 percent, and higher than last year's 17 percent, this is the United States cotton prices continued to rebound strong important reasons. Although nearly two weeks American cotton export sales turn poor, but this year time is not more than half, and American cotton export signing has more than half, especially with the arrival of the sales season, overall sales data is very strong. 

At the same time, the loosening of China's cotton quota policy, but also to the United States cotton exports continued to bring good, so the United States cotton prices callback limited. Recently, the domestic market believes that a large part of the rise in American cotton is attributable to unpriced positions. UNFIXED ON-CALL Sales is part of a business position and can be understood as a hedging position based on a basis trade. Its participants are cotton merchants, call instructions are usually issued by the factory (or other buyers) , in principle is the buyer after the price order, cotton merchants (that is, the seller) closed hedging tasks, access to base income.

 Of course, the actual situation may be different, there may be open position lag or leave part of the exposure. US cotton export signing data is strong, hedging short positions to settle futures positions naturally increased, disk confirmed the hot spot market sales. Domestic spot sales slow, the current should be the textile enterprises replenishment season, but we see its replenishment is weak. 

An earlier state reserve stock too much, new cotton centralized listing, adequate resources, textile enterprises appear calm instead. Second, March will start a new year's reserve cotton round out, for the new high cotton prices, the lower reaches are not "cold. ". The price of cotton picking by standard machines in Xinjiang also dropped from 15,500 yuan per ton in the early stage to 15,000 yuan per ton. At present, spot prices down to the cost of the ginning plant near, ginning plant will be at a loss or at par sales is also an issue. 

Cotton consumption is expected to be 8.5 million tons this year, the average monthly demand of just 700,000 tons, at the same time, yarn prices again lower than foreign yarn, follow-up domestic consumption is not bad. With the passage of time, as long as the ginning plant to withstand the pressure, the future will usher in the Dawn. 

And textile enterprises in the actual production, reserve cotton must be used with a certain proportion of the new cotton, so fill library although late, but will eventually cash. Internal and external cotton price difference contracted to the normal low level, as of January 8, Zheng Cotton warehouse single production number 4086, forecast 1143, and last year peak period warehouse single 5288, forecast 1369, although less than 1428, but the delivery is still large. 

A large number of warehouse orders in Xinjiang Warehouse Registration and delivery facilitation factors, but more cotton production, spot sales are not smooth, making a large influx of resources into the futures market. How to solve the problem of aftermarket warehouse receipt should be the focus of the market. In the near future, the difference in cotton prices from the high quickly fell from the peak of 3000 Yuan/ton to the current 1000 Yuan/ton less. DOMESTIC AND FOREIGN COTTON PRICE DIFFERENCE IN 1500 ~ 2000 Yuan/ton is generally agreed to the price difference level, too high or too low will lead to increased competition in the cotton market. 

The current domestic and foreign cotton price differential is conducive to the recovery of domestic textile competitiveness, if the low price differential for a longer period of time, coupled with the later domestic reserves of cheaper cotton will be released, which will help boost domestic cotton consumption, more cotton prices. From a fundamental point of view, the situation of strong American cotton and weak Zhengzhou cotton can still be maintained; from a statistical point of view, the difference between the two prices fell to a low level, we can consider the operation of cross-market arbitrage.