“U.S. cotton continued to rise sharply in the five trading days last week, and domestic spot cotton prices also rose simultaneously, but the upward trend was far less than that of U.S. cotton, causing the price gap between domestic and foreign cotton to widen again.” Teacher Zhang, a senior cotton-related person in Ningbo, Zhejiang, told Reporter, the current import cost of US cotton arriving at major ports in my country within the quota is around 17,600 yuan/ton.
On November 7, 6,000 tons of cotton from the central reserve came into the market, and the actual transaction volume was 400 tons, with a transaction rate of 7% and an average transaction price of 15,450 yuan/ton.
“Compared with the current import cost of U.S. cotton arriving at domestic ports within the quota and the latest Zheng cotton main contract price, the price difference is about 4,500 yuan/ton; compared with the Zheng cotton delivery month 2211 contract price, the price difference is also about 3,600 yuan/ton. “Teacher Zhang said that it is expected that this pattern of internal weakness and external strength will continue in the future.
Information from China Cotton Network shows that on October 31, the spot price difference between domestic and foreign cotton was -267.83 yuan/ton (the price of domestic cotton is lower than that of foreign cotton), and by November 7, this price difference expanded to -2983.1 yuan/ton. . On the futures market, the price difference between the main contract of Zheng cotton futures and the main contract of ICE cotton futures was 582.6 yuan/ton on October 28. By November 3, the price difference became -1479.9 yuan/ton.
Why has U.S. cotton been “moving like flying” recently while domestic cotton prices have been “faltering”?
Lao Fu, a cotton trader in Zhengzhou City, Henan Province, told reporters that since the end of August, the domestic and foreign cotton markets have been the focus of the global agricultural products market: First, from August 31 to October 31, the main March contract of US cotton was traded in 46 The cumulative drop within the day was 44.79 cents/pound, with a cumulative drop of 38.95%; second, from August 29 to October 31, Zheng Cotton’s main 2201 contract dropped a cumulative 3,010 yuan/ton in 40 trading days, with a cumulative drop of 19.70%. What is puzzling is that when the supply and demand relationship in the global and domestic cotton markets is stable and market expectations have not changed, from October 31 to November 4, in just one week (five trading days), the main US cotton 3 The monthly contract price increased by 17.66 cents/pound, an increase of 25.15%. During the same period, the price of Zheng Cotton’s main 2201 contract increased by about 1,200 yuan/ton, an increase of only about 10%.
“On the surface, the frequent occurrence of disaster weather in major cotton-producing countries in the international market, as well as the market’s expected increase in the probability of reduced cotton production in India, the United States and other countries, are the main reasons for the sudden sharp rise in U.S. cotton. However, every sudden and relatively It is not that simple to start a big market.” The business person in charge of a cotton company in Korla City, Xinjiang told reporters that analyzing the reasons for the recent sudden rise, we can find that first, there are large short profit-making positions in U.S. cotton and the domestic cotton market. Waiting for the settlement; secondly, there is a strong technical demand for correction of excessive price decline; thirdly, there is excessive rainfall in production areas such as India and there are variables that will change the output; fourthly, the macroeconomic situation has improved, as the market expects in the future The Federal Reserve’s high-intensity interest rate hikes are “unsustainable.” Specific factors that promote the upward trend of Zheng cotton include, in addition to profit-taking short positions, technical rebounds and other reasons, cotton farmers’ low recognition of the purchase price of seed cotton, their general reluctance to sell, and the high cost of planting new cotton this year are also important factors. For example, as international cotton prices and Zheng cotton futures prices continue to rise recently, the domestic cotton spot market has become more reluctant to sell and support prices.
According to the person in charge of a textile company, there are currently few new orders for domestic sales in the domestic textile market, and on-machine orders from weaving mills are also showing a shrinking trend. It is expected that new orders within the year will not be as good as the same period last year. For example, since October, the activity of production and sales in the textile market in Foshan and other places has declined. At the same time, overall orders for knitted fabrics were not good, as were woven clothing fabrics and low-count gray fabrics. Some textile mills believe that there is still room for decline in raw material prices.
Lao Fu believes that because the output of major cotton-producing countries in the international market is still difficult to determine, although downstream demand is not optimistic, the probability of cotton prices oscillating upward is still relatively high. Judging from the development of the domestic cotton market, as of now, the new season cotton picking work in Xinjiang is coming to an end, but the sales progress of seed cotton is slow. It is estimated that 40 to 50% of the seed cotton in northern Xinjiang is in the hands of cotton farmers, and about 30% in southern Xinjiang is in the hands of cotton farmers. . For Zheng Cotton’s main 2301 contract, around 13,000 yuan/ton may be a price that everyone recognizes.
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