At 22:09 on November 01, 2018, US President Trump issued a message through his Twitter: Just had a long and very friendly conversation with the Chinese leaders. We talked a lot about the topic, the focus is on trade. These discussions are going on smoothly. In the report of the Chinese authoritative media Xinhua News Agency, Trump also pointed out that it is very important for the two heads of state to communicate directly. We must maintain frequent contact; I look forward to the two sides meeting again during the summit of the G20 leaders in Argentina, we can Major issues are discussed in depth; we hope that the two sides will work together to fully prepare for our meeting; the US side attaches importance to US-China economic and trade cooperation and is willing to continue to expand exports to China; it is necessary for the economic teams of the two countries to strengthen communication and consultation. I support US companies to actively participate in the first China International Import Expo. Sino-US trade disputes seem to have eased.

I. Sino-US trade dispute

        Sino-US trade disputes have escalated again. On September 18, 2018, the US government announced that it will start to impose a 10% tariff on imports of 200 billion U.S. dollars from China on September 24, and rise to 25% from January 1, 2019. Retaliation against US farmers or other industries, the US government will immediately impose tariffs on approximately 267 billion US dollars in additional imports. We have turned this stage of further Sino-US trade disputes into the third stage.

        The market is generally worried that the Sino-US trade dispute will develop to the third stage. The pressure after this overweight can not be alleviated by the depreciation of the RMB and the increase of export tax rebate measures. It is precisely because of this concern that the long-term orders of domestic export enterprises The delivery time of Hong Kong has been seriously affected. The annual order volume has shrunk, and the enthusiasm of domestic enterprises for stocking stocks has declined. This sentiment has seriously affected the trend of commodity prices.

2. Sino-US trade disputes eased

        The so-called easing of Sino-US trade disputes has two levels: the first level of mitigation means that on January 1, 2019, the United States will stop importing 200 billion US dollars of goods imported into China, and impose a 25% tariff, maintaining the current 10% tariff increase. The second level of mitigation means that the United States will no longer use another $267 billion to impose tariffs on imports of Chinese goods.

        The Trump administration launched a 25% tariff on imports of 200 billion US dollars of goods to China on January 1, 2019. The Chinese government will inevitably have countermeasures; China has counter measures, and the Trump administration will immediately start 267 billion US dollars. Imported goods are subject to tariff measures. This is actually a linear reaction process. Unless the Trump administration stops adding 25% of the $200 billion in goods on January 1, 2019, the Sino-US trade dispute can be eased.

        The G20 meeting provided a time node for the mitigation of Sino-US trade disputes. The G20 summit will be held in Buenos Aires, Argentina, from November 30 to December 1, 2019, when the leaders of China and the United States will have the opportunity to meet and discuss to provide an opportunity for future Sino-US trade disputes to be moderated. .

        Note that we are discussing the easing of Sino-US trade disputes. It is not the cessation of Sino-US trade disputes. The Sino-US trade disputes have been eased and the market has been relieved. On the evening of November 1st, Beijing time, the conversation information and atmosphere revealed by the leaders of China and the United States made the market see the hope of the Sino-US trade dispute easing. China’s imports and exports with high dependence on the United States have experienced large fluctuations. There was a big rise, and the cardamom dipped in the pan.

       Third, the impact of trade wars on cotton

1. The cost of warehouse order conversion for cotton 1909 contract

        Since October 2018, the cotton 1909 contract has been operating below 17,000 and has gradually moved toward 16,000, with a minimum of 16060 (2018.10.29), which is gradually approaching the cost of Xinjiang machine cotton picking. On November 1, 2018, the purchase price of cottonseed cotton in Xinjiang was 5.6 yuan/kg, equivalent to the cost of lint 14400 yuan/ton.

        Calculated according to 5% capital cost, the monthly cost of funds is about 62 yuan / ton, the monthly storage fee is 18 yuan / ton, the monthly cost is 80 yuan / ton, and the delivery of cotton 1909 contract is 10 and a half months, that is, cotton 1909 The cost of holding a cotton warehouse receipt for a contract machine is 80*10.5=840 yuan/ton. Considering that the old warehouse receipt is 4 yuan/day from the time of August 1, the warehouse receipt cost of the cotton 1909 contract is converted to 14400+. 840+180=15420 yuan / ton.

        Calculated according to 10% capital cost, the monthly cost of funds is about 125 yuan / ton, the monthly storage fee is 18 yuan / ton, the monthly cost is 143 yuan / ton, and the delivery of cotton 1909 contract is 10 and a half months, that is, cotton 1909 The cost of holding a cotton warehouse receipt for a contract machine is 143*10.5=1501.5 yuan/ton. Considering that the old warehouse receipt is 4 yuan/day from the time of August 1, the warehouse receipt cost of the cotton 1909 contract is converted to 14400+. 1500+180=16080 yuan / ton.

        Affected by Sino-US trade disputes, the cotton 1909 contract has moved closer to the price of warehouse receipts.

2. Sino-US trade disputes affect the purchase of raw materials

        The cotton market is worried that the trade war will develop in the third stage. The Sino-US trade dispute will escalate. The United States will fully increase the tax on China's exports to the United States. China's macro total demand and China's textile and apparel exports to the United States will inevitably be greatly affected. Under the fear of escalating the trade dispute to the third stage, most companies are afraid to accept annual orders. If it is not guaranteed to export goods to the United States before December 31, 2018, the tax increase of 25% after the year cannot be digested. Costs, trade disputes, without the exact information mitigation, companies do not dare to rush to accept cross-annual orders, which affect the demand for replenishment, upstream raw material prices are difficult to improve.

3. Sino-US trade disputes have eased

        Whether the trade war is going to the third stage, the time window is the G20 meeting held in the Argentine capital on November 30, 2018. At that time, the leaders of China and the United States will meet and may talk about trade disputes, because they all understand that China and the United States The trade disputes have developed in the third stage, and the impact on both sides is too great. Basically, it is to block the mutual trade links between the two sides. Therefore, on the evening of November 1, 2018, Beijing time, the leaders of China and the United States made a phone call and released positive information. The possibility of Sino-US trade disputes moving to the third stage was reduced, the market sentiment was slightly eased, and cotton immediately rose. Cardamom diving.

4. There is still uncertainty in the easing of Sino-US trade disputes

        The so-called easing of Sino-US trade disputes is to confirm the easing, that is, to confirm that the United States no longer imposes a 25% tariff on 200 billion US dollars of goods in 2011.01.01. The attitude of both sides is confirmed, and it is clear that it is the real meaning of easing. The leaders of the country only expressed their easing intentions through preliminary telephone communication. There is no clear agreement document, and such easing is still relatively fragile. Because downstream companies will not rush to replenish the library because of a phone call from the leaders of the two countries, or begin to accept cross-annual orders; only confirmed agreements that are no longer upgraded, downstream companies can rest assured that orders can continue, and then dare to replenish the library. Therefore, the phone call of the leaders of the two countries on the night of November 1 caused the price of cotton to rebound. At best, it was a long-repressed emotional release, which was later affected by the substantive negotiation process.

5. Cotton trading strategy under the easing atmosphere of Sino-US trade disputes

        Sino-US trade disputes are moderated, that is, the real meaning of easing, the probability of cotton up is very high, the price of cotton 1909 contract around 16000 is relatively low, as long as the spot price of Xinjiang cotton pick cotton is around 14,400, and will not continue to fall. The 1909 contract is equivalent to holding the spot in the 15500-16100 range. Under the influence of a series of topics in the later period, the upward trend of cotton prices will still occur. (based on the trend report of cotton fundamentals, and then do thematic analysis)

        At present, the focus of domestic cotton is not the increase or decrease of domestic supply-side production, nor the amount of domestic imports after the release of taxation, but the suppression or pressure release of trade disputes on the demand side.

        At the time of the meeting between the leaders of the two countries on November 30, the atmosphere after the call has eased, but only after seeing a decisive easing agreement, the cotton can only be activated, otherwise the cotton price will fluctuate and repeat.

4. How much influence does the probability of dispute mitigation have?

        Personally, the probability of easing trade disputes is relatively large. It should be noted that we are discussing the "mitigation" of Sino-US trade disputes, not the "end" of Sino-US trade disputes. The definition of trade dispute mitigation is not to develop to the third stage, that is, on January 1, 2019, the United States stopped charging 25% of tariffs on China’s exports of US$200 million to the United States.

        There are many articles on the study of Sino-US trade disputes. I have also done a lot of reading, research and study. I personally think that the probability of easing is very high. Once it is developed to the third stage (ie, it is not moderated), it is the full coverage of Sino-US trade goods. The tax increase has a great impact. Trump is not prepared, and the domestic influence is also very large.

In the US domestic stock market correction, the pressure on the Trump administration to escalate Sino-US trade disputes has increased. The greater the pressure on the US domestic economic growth, the more the US stock market has retreated, and the greater the probability that Sino-US trade disputes will move toward a moderate direction.

        The cotton 1909 contract continues to be long or short near 16000. In fact, it is whether the trade war is going to the third stage. I tend to gamble on the Sino-US trade dispute easing: If the Sino-US trade dispute proves to be really easing, then the cotton 1909 contract is The price around 16000 is the bottom. It is difficult to have such an opportunity later. If the Sino-US trade warfare really develops to the third stage, then all commodities including cotton will have to bottom out.

        The confirmatory observation indicator is the soybean meal: as long as the soybean meal does not rebound sharply, it proves that the probability of the trade war is slowing down. Even if we have information blind spots, the world's four major grain producers have a large layout in domestic soybean imports. The research and policy grasp of trade wars will be highly valued. The price will not lie, as long as the price of soybean meal does not rebound sharply, it proves that the interests of multinational companies, including multinational companies, believe that it will move toward easing; once the soybean meal begins to rebound sharply or the daily limit, it proves that the current easing is an illusion and begins to consider closing the position. More cotton in your hand.

        On the evening of November 1, 2018, Trump passed the tact of the leaders of the two countries. After the call, the market responded quickly: in the domestic futures market, the cotton began to rise after 13 minutes of soybean meal diving, and the cotton was from 22:27. Beginning to pull up, the cardamom began to dive from 22:14, the sensitivity of the cardamom and the benefits involved are far greater than cotton.