According to statistics, as of February 24, 2022, there were 18,388 Zheng cotton warehouse receipts, 118 fewer than on February 15, and the warehouse receipts showed a trend of oscillation and decline. Although the number of warehouse receipts is still higher than the 592 in the same period of 2020/21, the year-on-year increase has dropped to 3.33%. It is generally judged in the industry that with the outflow of warehouse receipts and the growth of newly registered warehouse receipts slowing down significantly, the total volume of Zheng cotton warehouse receipts from March to April is likely to be lower than the same period last year.
Why have Zheng cotton warehouse receipts peaked and fallen recently? The author believes that there are several reasons: First, since February, the price of Zheng Cotton’s main CF2205 contract has dropped from 22,210 yuan/ton to 21,025 yuan/ton, a drop of more than 1,000 points, but the spot price has only adjusted back by 300-400 yuan/ton. , the current price difference of cotton futures widened again to 1,400-1,600 yuan/ton (excluding financial costs, warehousing and transaction delivery fees). Second, real estate cotton warehouse receipts with low premiums and good quality indicators have attracted the attention of some cotton spinning companies, and they are more willing to accept the goods. It is understood that the real estate cotton warehouse receipts in 2021/22 are mainly “Double 28 and Double 29”, which partially replaces Xinjiang cotton in 2021/22, but the transaction price differs by 1,200-1,500 yuan/ton. Third, as the 2021/22 cotton processing in Xinjiang is coming to an end in February, frost-season flowers with low quality indicators are concentrated on the market, or they do not meet the registration conditions for Zheng Cotton warehouse receipts or the discounts are relatively large. Cotton processing companies are selling almost 100% of the goods in stock. Fourth, Zheng Cotton fell by more than 1,000 points, ginners were reluctant to sell, and cotton traders and textile companies’ basis purchase spot business was significantly slowed down or even suspended, making hedging difficult to use.
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