Who defeated the agricultural shorts?

This week's major event "Doha" has been basically confirmed as a "dud" so far. The domestic commodity market was booming yesterday, and the low-key and slow-growing agricultural products relay broke out. Futures investors who have not yet completely changed their short-term thinking have once again been baptized by the market.

“I have been cutting very fast and have been cutting, but I still haven’t gotten rid of the ending of the liquidation.” Mr. Hu, a big futures investor in the south, told a reporter from China Securities News in frustration. In the past two days, In the unexpected surge in commodity prices, he was almost wiped out and is now in a state of rest where he has stopped trading. "The account drawdown is huge, and almost all the profits made last year have been lost."

The short-selling nightmare of "Red Tongtong"

In Tuesday night trading, Hu, who held a large number of short orders, It was a sleepless night for Mr. After the market opened at 9 o'clock in the evening, various varieties of the futures market continued their gains during the day: the black series rose sharply, and the hot coil, rebar, iron ore, coke and other varieties in the futures market all had an increase of about 5 or even higher; silver prices rose sharply. rose nearly 4; cotton rose more than 4.

For Mr. Liu, who is also short-selling, the red futures market on Wednesday was simply a nightmare. "I was short on asphalt, and the cost was 1,945 yuan/ton, but I still lost a lot. Before March, I had a relatively clear understanding of the market's rhythm. Since April, I can't figure out the market's logic." He said.

As of the close of the futures market on Wednesday, coke, rebar, iron ore, and Zheng cotton were at daily limit, coking coal was up 5.08, rapeseed meal was up 3.95, rubber was up 3.91, silver was up 3.84, eggs were up 3.69, soybeans were up 3.59, Thermal coal rose by 3.23, and soybean meal, starch, corn, asphalt, palm, etc. rose by more than 2.

What is different from the past few days is that the replenishment of agricultural products has accelerated, creating a general boom in the futures market.

In fact, starting from April 11, the upward trend of agricultural products has started.

According to statistics from a reporter from China Securities Journal, the Wenhua Finance Agricultural Products Index has rebounded by nearly 8.8 points since April 11, with the soft commodities sector leading the gains, with an increase of 8.9; the grain sector has increased by 8.1 over the same period; and oils and fats. Due to the large increase in the previous period, the sector became the bottom sector in this round of rise, but the increase also reached 6.1.

Qin Zhi, an analyst at China Business News, believes that in the current soft commodity market, cotton and sugar futures have received a lot of positive support and may become the new favorites of funds. The main reason is tight supply and demand caused by extreme weather and strong demand. From a supply perspective, market pressure has eased and news of supply shortages have emerged frequently. In particular, a top agency recently raised its annual sugar supply shortage estimate, which significantly exceeded expectations. Secondly, extreme weather speculation has resumed, and the impact of La Ni?a may exceed that of El Ni?o, at least in terms of market expectations.

Regarding the rising prices of agricultural products, Wang Chengqiang, an agricultural product analyst at New Era Futures, believes that despite the global grain production year after year, global grain inventories are close to the highest level in 30 years, and there is a serious oversupply. From the supply level, there is no basis for a bear market in agricultural products. Fluctuating, but this does not prevent the market price from building a bottom.

“The high inventory factor of old crops has already been factored into the price of agricultural products. The current financial dollar factor, the rotation and spillover effects of commodity bull market fluctuations, and the increased probability of La Ni?a in the second half of the year are enough to trigger The short-covering trend rebound will be the first stage of the rise of agricultural products. Once the weather pattern changes that threatens production, it will start the main rise of the bull market. In the time period when commodities become the latest allocation of assets, meal and oil will be the first stage. As a representative agricultural product, the future trend has huge potential for growth. The price of live pigs has recently reached a new record high, and the stock data in March have stopped falling and rebounded, which means that there is potential for growth in long-term feed demand. These positive signals need to be further explored by the market," he said.

Asset linkage pushes up the prices of agricultural products

Specifically, in the current round of rising prices of agricultural products, the rise of cotton is particularly prominent. Affected by the implementation of the rotation reserve policy and the phased replenishment of textile enterprises, the Zheng cotton 1609 contract has reached the daily limit 4 times in just 8 trading days, with an increase of more than 21 during the period.

As of today, China's cotton price index CC Index (3128B) continues to rise by 82 yuan to 12,083 yuan/ton, and cotton prices in the spot market have generally increased.

In the feed sector, the expansion of temporary reserves has stimulated the flow of corn from North China to the Northeast. Grain resource consumption is expected to continue, and oversold prices have begun to rebound; in terms of soybean meal and rapeseed meal, yesterday in the enthusiastic bullish atmosphere in the futures market, domestic The spot quotations of rapeseed meal were generally raised, and the spot market trend was firm. The spot price of soybean meal also rose strongly. The overall price increase yesterday was 70-80 yuan/ton.

In the international market, funds have also begun to pursue agricultural products, and U.S. soybean futures prices have surged to a nine-month high.

A report released by the U.S. Commodity Futures Trading Commission (CFTC) shows that in the past week as of April 12, 2016, speculative funds held a net long position in soybean futures and options on the Chicago Board of Trade (CBOT). There were 100,216 single lots, setting a high for net long orders since early June 2014. As of Tuesday, since April, the main Chicago CBOT soybean meal, soybean and corn contracts have increased by 9, 5.5 and 8.2 respectively, and the main New York ICE cotton contract has increased by 5.6.

CITIC Futures pointed out in its strategic weekly report released on April 17 that both China and the United States are currently in a period of gradual rebound in inflation levels from a macro environment perspective, and China is even experiencing a "quasi-stagflation" situation. Historically, commodities tend to perform well in periods of low growth and high inflation. In general, because they are directly related to CPI calculation, energy commodities and agricultural and animal husbandry commodities show a high correlation with inflation. Since energy commodities are difficult to store, their rolling returns are more prominent during periods of unexpectedly high inflation; the recent rise in the correlation between agricultural products and unexpected inflation is mainly due to the tightening of supply and demand caused by extreme weather and strong demand, and the impact of agricultural products on It is also sensitive to unexpected inflation. At present, the domestic black and chemical sectors have experienced significant increases. Unexpected inflation in the stagflation environment will gradually push up the prices of agricultural products.

The aftermath of commodities remains unsolved

According to industry insiders, with the recent increase in volatility in the futures market, the influx of funds into the futures market is obvious.

Yesterday, a source learned from a futures company that its brokerage headquarters recently