Currently, the harvesting and sales of seed cotton in the main cotton-producing areas of Changji, Kuitun, and Tacheng in northern Xinjiang have basically come to an end. The sales progress of hand-picked cotton in the three main cotton-producing areas of southern Xinjiang has also exceeded 65%. The harvest progress of machine-picked cotton should not be less than 50%. As the purchase price of seed cotton and the current price of lint cotton fell overall in late October, not only farmers’ enthusiasm for selling seed cotton increased, but the reluctance to sell by ginners and cotton traders also significantly cooled down.
From a statistical point of view, as of November 5, Xinjiang has processed a total of 2.1839 million tons of lint cotton in 2020/21 (the autonomous region’s lint processing volume is 1.2918 million tons, and the Corps’ lint processing volume is 892,100 tons), which is significantly higher During the same period last year. As of November 5, the cumulative notarized inspection of Xinjiang cotton in 2020/21 was 1,632,310 tons, an increase of 232,920 tons compared with the same period in 2019/20, a year-on-year increase of 17.19%. It shows that this year’s Xinjiang cotton has outstanding characteristics of “early market, fast harvest, and urgent processing”.
What is somewhat puzzling is that as of November 5, there were only 4,436 Zheng cotton warehouse receipts and only 969 valid forecasts. In the same period of 2019/20, the Zheng cotton warehouse receipts and valid forecasts reached 10,420 and 2,102 respectively. Zhang, down 57.43% and 53.9% respectively year-on-year. On the premise that the cumulative processing and public inspection volume of Xinjiang cotton has increased significantly in 2020/21, the number of warehouse receipts and effective forecasts of Zheng cotton have been “cut in half”. This shows that not only the proportion and enthusiasm of Xinjiang cotton processing enterprises for hedging are not high, but also the cotton trade Commercial traders and futures companies did not enter the market in a large scale and sweep goods in batches.
What reasons led to the sharp year-on-year decline in Zheng Cotton’s warehouse receipts and effective forecasts? The author summarizes the following points: First, domestic and foreign sales orders in October exceeded expectations and concerns about the quality indicators of machine-picked cotton in Xinjiang in 2020/21 led to the rapid outflow of warehouse receipts for Zheng Cotton in 2019/20, and textile companies and middlemen rushed to take over the warehouses. Single; second, the public inspection results of machine-picked cotton in Northern Xinjiang in 2020/21 are not satisfactory, which is manifested by short fiber, high horse value, and low breaking strength. The proportion of “double 28 and double 29” has dropped significantly compared with the previous two years. Therefore, there are too many batches that do not meet the conditions for generating warehouse receipts or have relatively high discounts, and the ginners are not active in hedging; thirdly, the consolidation time of the Zheng Cotton CF2101 contract above 15,000 yuan/ton is relatively short, and some ginners are short of 15,000 yuan/ton. – Opportunities for hedging in the range of 15,300 yuan/ton (the current market price of 14,300-14,500 yuan/ton is close to the cost of machine-picked cotton, and even production and sales are “inverted”); fourth, due to the weak early bloom indicators of machine-picked cotton in 2020/21, In addition, cotton processing enterprises in Xinjiang are generally reluctant to sell, so traders and futures companies have signed a large number of contracts and have few opportunities to get goods, so they passively choose to wait and see. Fifth, due to the escalation of epidemic prevention and control, transport vehicles in some areas need to “certify for work.” Due to the internal reasons of delivery warehouses in Xinjiang, the generation of warehouse receipts is relatively slow. </p
