As the new cotton harvest enters the countdown and Zheng cotton futures consolidate and oscillate, some cotton traders adopt various methods such as pending orders, basis spreads, fixed prices, etc. to speed up spot sales and strive to withdraw funds as soon as possible to prepare for the new year’s cotton acquisition, Prepare for business.
According to statistics from the Cotton Logistics Branch of the China Cotton Association, as of the end of July, the total cotton turnover inventory nationwide was approximately 1.731 million tons, lower than 260,700 tons in the same period last year (including 1.1271 million tons of commercial cotton turnover inventory in Xinjiang, accounting for 65.11% of the total national turnover inventory). Taking into account factors such as the weak road and railway shipments of cotton from Xinjiang in August, the slowdown in cotton consumption demand, and the delay in restocking by textile companies, the industry estimates that the total national cotton turnover inventory may be no less than 1.3 million tons by the end of August.
According to the survey, the current cotton inventory of traders is not low or even high, and shows the following two characteristics: First, the inventory level varies, and there are not a few large traders with cotton inventories of more than 1,000 batches ( A certain cotton enterprise in Zhejiang has more than 2,000 batches of inventory, including state reserve commercial cotton); while some small and medium-sized trading enterprises have very little inventory left or have cleared all their stocks; second, large and medium-sized cotton enterprises with larger inventories and more abundant funds are holding up prices and are reluctant to sell. The stronger the emotion. On the one hand, cotton companies have strong expectations for higher seed cotton purchase prices in 2021/22; on the other hand, under the premise of the severe global anti-epidemic situation, monetary easing, and the rebound in European and American economies, the structural bull market may continue.
Since commercial cotton inventory resources in September/October are concentrated in the hands of several large cotton companies, and the futures price is upside down at 500-800 yuan/ton, the procurement focus of cotton companies has shifted to state reserve cotton, port bonded cotton and cargo. </p
