According to CFTC statistics, as of January 7, 2022, there were 122,288 ON-CAll contracts for 2021/22 on the ICE cotton futures disk, an increase of 1,679 contracts from December 22, 2021, an increase of 1.39%.
Several international cotton merchants and cotton trading companies said that as the main ICE futures contract has continued to rise in the past week or so, the willingness of buyers such as cotton spinning companies and middlemen to make short-term transactions continues to decline, and a large number of ON-CALL contracts are facing postponement. Execution and negotiation to terminate the contract, and some contracts are repurchased by the seller at a suitable price. In addition, as ICE’s main contract opens the “skylight” of 120 cents/pound, the cotton spot purchase contract signed in November/December is also facing execution pressure due to the lack of enthusiasm of exporters and cotton traders for delivery and delayed performance of the contract. Cotton companies The holding and selling sentiment continues to heat up.
Judging from the survey, in recent days, inquiries and transactions at major ports in China have been relatively weak for cargoes quoted in US dollars, bonded cotton, and customs clearance cotton quoted in RMB, especially for high-grade and high-quality Australian cotton, American cotton, and Brazilian cotton. Cotton and other shipments are even more deserted. Although China Textile Group/China Cotton Group and others are still targeting cotton textile companies to release cotton from outside the bonded area (including 2020/21 Indian cotton and West African cotton), most buyers with quotas choose to wait and see. On the one hand, as of now, there are very few cotton import quotas within the 1% tariff in 2021, and the 1% tariff quota in 2022 has not yet been issued to enterprises; on the other hand, ICE’s main contract has exceeded 120 cents/pound, while cotton yarn, The growth rate of terminals such as gray fabrics and clothing lags significantly behind that of futures, and the consumption pressure of textile enterprises continues to rise.
From January 18th to 19th, Qingdao Port bonded Brazilian cotton M 1-1/8 (strong 28/29GPT) was quoted at 137.50-139.50 cents/pound, and the direct import cost under 1% tariff was 21250-21550 yuan/ton (net weight) , which is more than 2,000 yuan/ton lower than the “Double 28” Xinjiang machine-picked cotton quoted by Jiangsu, Shandong, Henan and other internal warehouses.
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