Long Staple Cotton Ginning Mills Generally Lose Money, And Spot Prices Continue To Fall

According to the survey, as the panel price of CF1709 contract fell below 15500 yuan/ton, the hedging traders and cotton enterprises again lowered the quotation of Xinjiang cotton in 2016/17. On March 21-22, the official price of "Shuang 28" (horse value is C2) hand picked cotton stored in Zhengzhou, Henan Province by a cotton enterprise was reduced to 15450-15500 yuan/ton. Customers who purchase more than three batches of cotton at a single time can negotiate a profit margin of 50-100 yuan/ton. However, the gross weight quotation of "Shuang 30" (Horse value B2) machine picking cotton and 3130/4130 (about 50% each, Horse value B2) machine picking cotton in Jiangsu warehouse was reduced to 16000-16100 yuan/ton and 15800-15900 yuan/ton, and it was required to settle according to the public inspection of the original bill.

Since the first ten days of March, the quotation adjustment of Xinjiang cotton has generally reached 300-400 yuan/ton. Some textile enterprises in Henan, Hebei and other places said that compared with the decline of Zheng Mian's CF1705 contract and the panel price, the decline of spot price of Xinjiang cotton lagged significantly, and the actual cost was more than 400 yuan/ton lower than the spot price, no matter whether the warehouse receipt was received below 15000 yuan/ton or the reserve cotton was auctioned. Most traders and cotton enterprises require settlement according to the original order (gross weight quotation). Considering that processing from October to December to late March has been nearly half a year, the cost performance ratio may not be high.

Since March 20, Urumqi, Shihezi and other places in northern Xinjiang have experienced cooling and snowfall. Some cotton traders reported that the delivery of cotton and road transportation were affected, but the impact on cotton prices and supply and demand of cotton market was not significant. Some regiments in Kashgar, Bachu, Aksu, Korla and other places in southern Xinjiang have taken the lead in sowing. It is expected that the peak of cotton sowing will come from the end of March to the end of April. Generally, the planting time is 3-5 days later than that of the Corps, and the sowing time in most cotton areas in Kashgar is 3-4 days earlier than that in Aksu and 5-10 days earlier than that in Korla.

According to the survey, due to the planting in 2016 long-staple cotton The income of the cotton ginning plant is significantly lower than that of fine staple cotton. In addition, long staple cotton ginning plants generally suffer losses. Therefore, the planting area of long staple cotton in Awati, Kuqa, Shaya, Xinhe and other places will decline significantly, and the enthusiasm for changing to fine staple cotton will rise. In addition, due to the low prices of corn, wheat and other food crops in 2016, farmers' income was low or even lost, so most of them planned to switch to cotton this year. Some cotton enterprises in southern Xinjiang believe that in 2017 Xinjiang The planting area of fine staple cotton may increase by 8% - 10% or even higher on a year-on-year basis.

According to statistics, as of March 21, there were 3058 warehouse receipts (+41) and 2478 valid warehouse receipts (+183) for Zheng Mian, with a total of 5536 (about 2214400 tons of lint); On March 21, the position of Zheng Mian was slightly reduced to 405000 hands (2025000 tons), and the firm offer pressure of Zheng Mian reached 21.87% (warehouse receipt+effective forecast). Since some traders are engaged in futures arbitrage trading, there is a big variable in the proportion of effective forecast warehouse receipts that ultimately generate warehouse receipts, which is one of the important reasons why Zheng Mian's main CF1705 contract has fallen below the resistance level of 15000 yuan/ton in recent days.

Although downstream textile mills Cotton yarn Orders were received smoothly, and the inventory of finished products was greatly reduced. Some manufacturers even ran short of high count yarn, high configuration yarn, JC40S and JC60S. However, the spot price of cotton in 2016/17 was only 200-300 yuan/ton lower than that before the Spring Festival (the pace of adjustment was significantly behind that of futures), and the acceptance price of terminal blank cloth and clothing orders remained at the level before the Spring Festival. Therefore, despite the large number of orders, However, the low profit is another major factor restricting the rebound of Zheng Mian and spot listing prices.

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