According to feedback from cotton traders in Qingdao, Zhangjiagang and other places, the basis difference of cargo, bonded and customs-cleared foreign cotton has remained stable in recent days. Foreign businessmen and cotton importing enterprises are not very enthusiastic about “exchanging price for volume”. The spot goods at the port Mainly American cotton, Indian cotton, Brazilian cotton, West African cotton, etc.
A cotton company in Zhangjiagang said that although the ICE cotton futures December contract broke through 70 cents/pound and 69 cents/pound last week, the spot quotations of US cotton, Brazilian cotton and other products were due to export companies/trade The merchants also have strong resilience and the downward adjustment is obviously weaker than that of ICE. The profit margin of hedging orders by “closing short orders and selling spot” is larger than that of delivery. In theory, the spot quotations of trading companies have greater bargaining and preferential power. , but sellers generally made little concessions (a few traders bucked the trend and slightly increased the basis spreads of Brazilian cotton, Indian cotton, and US cotton).
It is understood that in the past half month, ICE front-month contracts have exceeded 72 cents/pound, 70 cents/pound, and 69 cents/pound, and the transactions of some ON-CALL price contracts have accelerated (according to CFTC Statistics, as of November 6, there are 88,935 ON-CAll contracts for 2020/21, a decrease of 2,557 contracts from October 23, a decrease of 2.8%). On the one hand, cotton textile mills and middlemen are worried that after the US presidential election, a strong fiscal stimulus plan (the scale of which may reach about US$2 trillion) will be launched to achieve the purpose of fighting the epidemic, protecting the economy, and promoting employment. ICE is in the US stock market, The commodity futures market has followed the rise; on the other hand, from a time perspective, the harvest and processing progress of US cotton in 2020/21 continues to accelerate, and it is more difficult for ON-CALL orders in 2019/20 to continue to be postponed or not executed. Some buyers from China, Vietnam, Pakistan and other countries had to settle for the next best thing and make deals at prices below 70 cents/pound for the ICE front-month contract.
On November 15th and 16th, the quotations of Qingdao Hong Kong American cotton M 1-5/32 and M 31-3 36 of a large cotton enterprise were 15300-15400 yuan/ton (net weight settlement) and 15400 yuan/ton respectively. -15,500 yuan/ton; and the spot quotation of Brazilian cotton M 1-1/8 in December is also as high as 15,300-15,400 yuan/ton. Compared with the same quality and grade of American cotton, the quotation of Brazilian cotton is much higher than that of the US cotton of the same quality and grade. trend. Textile companies in Henan, Jiangsu and other places said that although the additional 400,000 tons of cotton import quotas with sliding quasi-tariffs in 2020 have been issued, because they are all processing trade and are 100% non-state-owned and only targeted at cotton textile companies, in addition to textile companies In addition to buying as you use, most cotton companies and small and medium-sized textile factories did not participate. </p
