Although ICE cotton futures rose by more than 3% during the “National Day” period, and domestic seed cotton purchase prices continued to rise, investors generally believed that Zheng Cotton would have a “good start” after the holiday, laying the foundation for the cotton market to rise, but no one expected The high point of Zheng cotton reached 13,300 yuan/ton, an increase of 3.87%.
Some ginners, traders, and investment institutions believe that the surge in Zheng cotton has opened up a “crux” for cotton farmers, ginners, and cotton traders to a certain extent. It not only effectively mobilizes cotton processing companies to purchase seed cotton. The enthusiasm of traders, and the purchase of Xinjiang cotton by traders has quickly been put on the agenda, and the conditions for negotiation and cooperation between buyers and sellers have gradually matured. Ginning plants need to speed up capital turnover and achieve “quick acquisition, quick processing, quick sales, and quick payment collection”, while traders need to expand the quantity and scale of cotton operations to gain a living space in the cotton market.
Why do traders insist on purchasing Xinjiang cotton based on basis difference? The industry views are as follows: First, compared with other bulk agricultural products, cotton is a “depression” in value (corn and other food crops have been on an upward path since 2020); second, compared with other products, cotton warehouse receipts are “standard” , quality and grade indicators are reliable, procurement is convenient, saves time and effort, and risks are low; third, monetary policy continues to be loose this year, cotton trading companies have sufficient funds, and interest rates are low; fourth, traders can use hedging, arbitrage, options, and hedging and other ways to avoid risks.
Why did Zheng cotton suddenly rise after the holiday? The author’s views are briefly summarized as follows: First, global agricultural product prices rose sharply during the National Day period. According to statistics, in just one week, agricultural products such as corn, soybeans, wheat, and soybean meal increased by 7.16%, 6.42%, 10.51%, and 9.54% respectively, and rubber also increased by 4.17%; secondly, domestic economic data has generally improved, and investors Confidence restored. According to statistics, more than 600 million people traveled in China during the eight-day long holiday, with domestic tourism revenue reaching 466.56 billion yuan; sales of key monitored enterprises in retail and catering nationwide were approximately 1.6 trillion yuan. The impact of the epidemic on China’s economy, production, life, and transportation has gradually faded away; third, the central bank’s monetary easing policy continues. Judging from the release news, monetary policy may not be more loose during the year, but loan interest rates still have room to decline; fourth, under the “Golden Nine and Silver Ten” environment of the textile industry, cotton yarn, gray cloth, fabrics, clothing prices and orders have shown varying degrees of decline Rising, the pressure on terminal consumption has been effectively released in stages. Some export-oriented enterprises and foreign trade companies in coastal areas reported that the rebound in export orders is still continuing, and the “darkest” moment of the entire cotton textile industry has passed. </p
