On November 14, the State Administration of Grain and Material Reserves officially announced that it would start rotating in reserve cotton from December 2. In the blink of an eye, the countdown to the official round has entered, but compared with the enthusiasm for deposits in previous years, the performance of all parties in the market this year has been relatively calm. According to statistics from the National Cotton Market Monitoring System, the average price of the national cotton price B index last week was 13,016 yuan/ton, a month-on-month increase of 85 yuan/ton; the average settlement price of the main contract of Zhengzhou cotton futures was 12,862 yuan/ton, a month-on-month decrease of 61 yuan/ton. 0.47%. Compared with spot prices, cotton futures prices have insufficient support and are running weakly.
As of November 21, a total of 2.947 million tons of lint cotton have been processed nationwide, and 2.394 million tons have been inspected by public inspections. The quantity of cotton processed continues to increase rapidly, the supply side is becoming looser, and domestic commercial inventories have rebounded sharply again. Due to the recent sharp discount of futures prices to spot prices, some ginners have reported that the price of seed cotton continues to be strong in the later period, and the cost of lint processing is high. It is not appropriate to register warehouse receipts now, and the pace of current rollover has slowed down. At present, most cotton ginners have a stable mentality and continue to be busy speeding up public inspections and waiting for the right time to enter the market.
Since late November, the demand for raw cotton by downstream textile companies has dropped significantly compared with October. This is mainly due to the following reasons: First, the traditional textile peak season has ended, and the number of new orders has been very few. Textile companies have Under the sales-fixed-production model, it is difficult for cotton demand to increase; secondly, some textile enterprises went to Xinjiang to purchase new cotton in the early stage. However, as the cost of processing lint cotton in Xinjiang increased, the quotations of lint cotton from ginners in Xinjiang continued to rise, and textile enterprises accepted it. The price has dropped, and the mentality of waiting for later price points to pick up leaks has developed; thirdly, some old cotton from the previous year has a higher cost performance, and new cotton does not have an advantage, which again restricts the digestion of lint cotton. Downstream textile companies continue to purchase as needed, and their on-demand purchasing strategy has not been significantly adjusted.
Similar to ginners and downstream textile companies, the performance of cotton-related trading companies is also relatively calm. Due to the risk impact caused by the sharp drop in cotton prices this year, trading companies are more cautious in adopting both futures and cash transactions. In this way, do not hoard goods on a large scale and do not bet on the blind market. The fundamental prerequisite is to lock in reasonable profits and stabilize operations based on market trends.
As the countdown to the rotation of reserve cotton begins, how this year’s rotation will be carried out requires industry planning in advance, but no matter how the details are formulated, stabilizing the market will be the main purpose of policy implementation, and the current market performance It just proves this point. According to the requirements of this year’s reserve cotton rotation document, the total purchase and reserve volume is about 500,000 tons, and the daily bidding is about 7,000 tons. The purchase and storage rhythm is clearly controlled in terms of quantity. Storage enterprises should reasonably arrange plans according to their own conditions, and operate according to the quantity in a timely manner. into storage to avoid centralized storage or unqualified storage quality. </p
