Since February 26, Zheng Cotton has started a wide oscillation mode, with the main contract falling below the 15,800 key point from above 17,000 yuan/ton (a drop of nearly 7.5% in just 6 trading days). The market, cotton and cotton textile The divergence in market sentiment has increased, and the direction is very unclear. Judging from the changes in positions and daily trading volume, both long and short parties are very cautious.
According to a survey of several cotton traders and ginners in Xinjiang, although the CF2105 contract has been reduced by more than 1,100 points, the cotton spot price remains unchanged regardless of whether it is in Xinjiang’s supervision warehouse or inland warehouses such as Henan, Shandong, and Jiangsu. The decline in quotations was significantly lower than that of Zheng Mian. On March 5, the quotation of “Double 28” (level 31) machine-picked cotton in the supervision warehouses in Aksu, Korla and other places was 15,800-16,000 yuan/ton, which was gradually inverted with the CF2105 contract price by 100-200 yuan/ton.
Some cotton-related companies have reported that after the CF2105 contract fell below the 16,000 yuan/ton mark, a large number of cotton trading companies and futures companies have significantly slowed down or even suspended Xinjiang cotton purchases in 2020/21, and instead increased their purchases. The spot sales of lint cotton are strong, and the Xinjiang cotton resources on the shelves continue to increase. Not only are there orders, price points and basis sales, but there is also a lot of Xinjiang cotton in transit.
A cotton company in Jiangsu said that the lint cotton purchased by traders is almost 100% hedging, and most of them will be operated in an arbitrage manner (even if it is shipped to the mainland delivery warehouse, it is rarely delivered). Although the spot price of lint cotton is tight It is a “weather vane” with Zheng Mian, but it is a hindsight and is significantly behind Zheng Mian. Therefore, the “arbitrage” operation not only improves the net profits of cotton trading companies, but also recovers payment and funds in advance compared with delivery, reducing financial costs. expenditure.
It is understood that although traders and processing companies took advantage of the price of Zheng cotton to exceed 16,000 yuan/ton, they quickly placed orders and sold lint cotton at a fixed price. However, textile companies mostly purchased according to the order, watched more and moved less to take advantage of the low price. Price transactions are the main focus. At present, there are relatively few mainland cotton textile companies that take the initiative to go to Xinjiang to view goods and purchase lint cotton. They either purchase from nearby warehouses in the mainland or entrust sellers or cotton trading companies to ship on their behalf, saving travel, reception and other expenses. </p
