The trend of Zheng Cotton’s near-month and far-month contracts has bifurcated, which is expected. The Zheng Cotton 2201 contract is approaching delivery, and there is a high probability of a return, while the far-month contract is affected by a variety of factors and is temporarily difficult to follow.
Judging from the disk, the Zheng cotton 2201 contract has shown signs of small steps rising, and will eventually rise to the same level as the spot price. The market price is now maintained at around 20,800 yuan/ton. The current spot price of Xinjiang cotton 3128 grade is 22,000 yuan/ton. Coupled with the premium generated by the warehouse receipt indicator, it means that the futures price can be basically stable and stable above 20,100 yuan/ton. Spot prices are flat.
Specifically, the cost of cotton processing in Xinjiang this year is high, with the average price above 22,000 yuan/ton. According to the law of one price, the current price will eventually return when entering the delivery month. Therefore, the price in the near month is relatively strong, while the price in the far month is obviously On the weak side, the price difference between the two has also widened, and the current price difference has expanded to 1,400 yuan/ton.
The current weak price in far months is obviously because market funds are cautious about the market outlook. This is indeed the case. The market is relatively pessimistic regardless of macroeconomics or supply and demand fundamentals. The outside world expects that the Federal Reserve’s balance sheet reduction time will be significantly advanced. In addition, the global economy is in stagflation, and the economic situation is still full of uncertainties. From the perspective of demand, domestic cotton consumption has declined, corporate finished product inventories have accumulated, cotton price transmission has encountered resistance, and all parties in the industry chain continue to compete.
The income of cotton farmers this year is at a historically high level, and enthusiasm for cotton planting will increase next year. According to surveys in the mainland and Xinjiang, cotton farmers are willing to expand their planting area. In particular, the income from cotton planting in Xinjiang is significantly higher than that of other cash crops, and there is great potential to switch to cotton next year. From a global perspective, the overall cotton planting income this year is also among the best among agricultural products, and the planting area is likely to be higher than last year. As long as there are no abnormal weather, cotton will have a bumper yield, which will put great pressure on future prices.
For cotton ginning companies, companies that purchased cotton at high prices this year have already suffered a lot, but the game of drumming and passing flowers is not over yet. The white cotton has become a hot potato. The pressure faced by Xinjiang ginning companies continues to accumulate. The acquisition season of the new year has just ended. Enterprises are not under great financial pressure and can continue to raise prices for a period of time. If there are real problems with consumption in the market outlook, Khmer prices will inevitably face great downward pressure, and the ginning industry will inevitably be reshuffled. Therefore, the current trend of Zheng Cotton in far months is obviously weak, while the trend in recent months is relatively strong.
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