On the 19th, Zheng cotton futures continued to maintain their upward trend. The main contract CF2101 opened at 15,000 yuan/ton in the morning, exceeding the expectations of many industry players. The prices of seed cotton, lint, cotton yarn, and cotton cloth increased accordingly, which especially made cotton farmers during the harvest season even more happy. According to the current new cotton harvest survey, the cotton harvest in northern Xinjiang is coming to an end, and the cotton harvest in southern Xinjiang is basically over half.
On Friday, the main U.S. cotton futures price rose to a high in February this year. The December contract closed at 69.92 cents/pound, with the intraday high reaching 70.04 cents/pound. The rise in foreign cotton prices has further consolidated the confidence of domestic investors, and long funds have gained the upper hand in the near future. Cotton futures at home and abroad have risen in resonance, providing opportunities for cotton-related trading companies to sell cotton. Judging from the operating conditions of some cotton merchants, the cotton market continues to be active after the National Day, and the mentality of “buying up, not buying down” has prompted textile companies to speed up the pace of stocking. Therefore, although cotton prices have risen by nearly 2,000 points, spot purchases and sales have not stagnated. In addition, the price of new cotton in Xinjiang and outside Xinjiang continues to rise, and cotton companies have also raised the price of lint cotton, and the rush to harvest seed cotton has not stopped.
According to a survey of downstream textile companies in Jiangsu, Zhejiang, Shandong and other places, there have been a lot of new orders recently, mainly to meet Double Eleven and Christmas. The prices of raw material cotton and short fiber have been rising, and the prices of yarn mill products have been rising. The prices have been adjusted to varying degrees, among which carded 32S yarn has been raised by 500-1,200 yuan/ton, and individual companies have been forced to start a war of “grabbing cotton” and “grabbing yarn”. The person in charge of a textile company in Jiangsu said that the losses of some yarns have now narrowed. If the low-priced raw materials in the early stage are taken into account, positive profits have basically been achieved. However, how long the hot market can last is still a wait-and-see attitude, and cotton stocking is also within a certain plan.
Amidst the excitement upstream and downstream, some market participants believe that the new cotton harvest in Northern Xinjiang has basically ended, and the cost of machine-picked cotton has become a foregone conclusion. The cost is approximately 14,300-14,700 yuan/ton. Therefore, the CF2101 contract currently covers the cost of machine-picked cotton in Northern Xinjiang, and the risk that comes with it is the intervention of hedging orders. Therefore, it is expected that the resistance to continued rise in cotton prices will also increase. </p
