According to feedback from some processing companies and traders in Xinjiang, affected by high lint stocks and continued financial pressure, companies are more willing to ship. It is expected that Xinjiang cotton supply will increase significantly in 2019/20. Recently, some large and medium-sized cotton traders and a few processing companies in Xinjiang have increased their efforts to push quotations through e-commerce platforms, WeChat, emails, phone calls and other methods, with a strong intention to withdraw funds.
Some cotton companies in Aksu and Korla said that as of the end of May, about 70% of ginneries in southern Xinjiang had achieved “double knot zero”, and a few cotton companies still had 3-10 batches of cotton in stock. In Zhengzhou, When the cotton CF2009 contract failed to open the 12,000 yuan/ton mark many times, the bullish confidence of cotton companies faded and the mood for sales realization increased. From a time point of view, from May to July, cotton processing companies and traders faced expenses such as loan repayment, equipment replacement, and personnel wages. In addition, they needed to raise loan deposits, self-owned acquisition funds, etc., and their cash needs gradually increased.
From the survey, in the past week, the basis quotations of some cotton trading companies and ginners have been stable, and the impact of the decline in the main contract of Zheng Cotton has been limited. However, some cotton companies have expanded their hedging profit margins. , stimulated by high spot inventory, the basis was actively lowered by 30-100 yuan/ton (Xinjiang cotton was lowered by 50-100 yuan/ton, and the real estate cotton in the Yellow River Basin was lowered by 30-50 yuan/ton), which had an impact on the spot market price. .
A cotton trader in Henan believes that the short-term Zheng cotton CF2009 contract will still consolidate within the 11,500-12,000 yuan/ton compartment, and the state of “bottom below and top above” remains unchanged, lower than 11,500 yuan /ton will be supported by a large number of “price point” orders from cotton textile mills and middlemen. However, restricted by unfavorable factors such as the swinging Sino-US relations, insufficient orders in summer and autumn, and sharp fluctuations in the RMB exchange rate, Xinjiang cotton processing companies can speed up sales and clear positions in June. The market situation has gradually become clearer, and blindly betting on the market outlook is likely to outweigh the gains. </p
