The cotton collection and storage work for this year is about to end at the end of the month, and the cotton market will also lose important psychological support. How to interpret the trend of cotton prices during the policy vacuum period is a matter of great concern to the market. Most industry experts believe that the current bullish and bearish factors of cotton futures are intertwined, with a focus on the issuance of sliding tax quotas, which may fall further in the short term, but are cautiously bullish in the medium term.

From the recent trend of cotton futures alone, it is indeed relatively weak. Yesterday, Zheng Mian's main 1209 contract closed at 21625 yuan/ton, a decrease of 25 yuan or 0.12% compared to the previous day's settlement price, and a reduction of 8186 positions to 340106 positions. Since early February, Zheng Mian has maintained a fluctuating downward trend overall.

Lin Shujuan, an analyst at Guotai Junan Futures, said that the cotton spot index has been declining for several weeks. The news of India's ban has caused minor market turmoil, but the overall impact is not significant. As of the 28th, the domestic cotton harvest and storage exceeded 3.07 million tons. The early stage of harvest and storage played an important role in supporting cotton prices, and the number of cotton circulating on the market decreased. However, it is necessary to pay attention to the backlog of ports and the import cotton quantity waiting for quota distribution exceeding 1 million tons. The current price difference between domestic and foreign cotton has reached a historic high, and the issuance of quotas will have a significant suppressive effect on domestic cotton prices.

Quota distribution is indeed the focus of the market. Some cotton industry insiders have stated that the impact of storage on the market has recently decreased. At present, the price of imported cotton is mostly around 15000 yuan/ton, while that of American cotton is around 17000 yuan/ton, with a price difference of over 3000 yuan/ton between domestic and international prices. If the country issues new quotas, a large amount of low-priced imported cotton arriving at the port will inevitably lower domestic prices in the short term. But if quotas are not issued or issued less, from a cost perspective, cotton prices are still prone to rise but difficult to fall in the medium term.

After the end of collection and storage, the cotton market also needs to pay attention to: the import and export of major consumer countries, the status of the cotton textile industry, the cotton planting situation in the new year, and changes in fund holdings. Personally, I believe that domestic collection and storage policies will still protect the cotton market in the new year, but the high point of cotton in the new year will not exceed 25000 yuan/ton. "Lin Shujuan said that the narrowing of the price difference between domestic and foreign cotton is a high probability event, and if the planting area in the new year decreases significantly, Market speculation may escalate, leading to an increase in international cotton prices. However, due to the large amount of low-priced imported cotton and national inventory in China, it can offset the impact of international cotton price increases.

Xu Wei of Nanzheng Futures stated that the current cotton market is generally light, but the divergence between the long and short positions is still ongoing. The benefits mainly come from the supply side. Firstly, the total amount of cotton collected and stored exceeds 3 million tons, which is close to half of the domestic cotton production, reducing the inventory in the circulation sector. Secondly, there is an expectation of a decrease in the planting area for the next year. According to the latest survey by the National Cotton Market Monitoring System in March, the intentional planting area of domestic cotton decreased by 9.1% year-on-year; This Friday, the United States Department of Agriculture (USDA) will release a report on the intended area of cotton cultivation in the United States, with current forecasts of a 10% decrease. Furthermore, the collection and storage price is set at 20400 yuan/ton in the new year, an increase of 600 yuan/ton compared to this year. Although it will only be launched in September, it will still have a psychological impact on the forward market.

However, the weak demand side also restricts the cotton market, with yarn mills generally experiencing losses and low operating rates. In February, China imported cotton yarn