After The Fall Of Cotton Prices, National Cotton Stores Become The Pricing Vane.

In May 16th, Zheng cotton main contract CF1909 picked up 14200 yuan / ton position after a sharp fall. Due to the short time fall in the previous few days, the spot market quotation was somewhat out of step.

From Xinjiang ginning enterprises, mainland traders to port cotton traders, they have said that the short term can only be based on wait-and-see. If we adjust the spot price according to the futures price cut, it is unacceptable.

At present, the price of zhengmian futures is far below its value. For futures hedging enterprises, a reasonable price can be found through the basis, but the merchants who sell them at fixed prices are looking for a new pricing standard.

At the beginning of this week, the ICE main contract in July reached the lowest level of 65.45 cents / pound in August 31, 2016, the lowest in nearly 3 years.

Domestic importing cotton traders were surprised that the drop was more than expected. Some stockpiling traders were worried that they would continue to fall in the late stage, reducing the spot price by 300-400 yuan / ton, but shipments were still difficult.

After last week's cotton spinning, some textile enterprises adjusted their strategies to give priority to the selection of cost-effective cotton reserves. In addition, considering the uncertainty of Sino US trade negotiations, the import and export volume of imported cotton had not recovered significantly after maintaining low inventory raw material production and reducing the risk of enterprises at a cost effective basis.

Because of the high cost of early customs clearance, the importing cotton merchants have a strong mentality against the current low prices, and some enterprises temporarily stop offering quotations.

According to feedback from traders in Qingdao port, we will wait until prices are stable before we make plans. We will mainly quote the price of cotton reserve.

Because downstream enterprises will purchase price in turn.

The purchase and sale of Xinjiang cotton has also been stagnant in the near future. Most of the lint cotton mill in Northern Xinjiang has been resold to traders. Due to the Limited surplus stock, the selling mentality of enterprises is strong. If they are sold at the current market price, they are unacceptable.

This year, the hand picked cotton in southern Xinjiang was poor, and now it is a serious loss.

Warehouses in Akesu and Korla are few in recent days.

Some enterprises believe that this year's state-owned cotton production is not large enough and is mainly satisfied with the low end market. High grade Xinjiang cotton is still in demand, and it would rather wait for the market to pick up.

For the recent irrational decline of Zheng cotton, enterprises firmly believe that "deep down will rebound."

In May 16th, the planned sale of reserve cotton was 11 thousand tons, and the average price was 13491 yuan / ton, up 27 yuan / ton compared with the previous trading day.

After the difficulty of importing cotton and Xinjiang cotton, the State Cotton store paction seems to be the "wind vane" of cotton market pricing. Most merchants say they will re pricing according to their actual situation, so as to find acceptable standards acceptable to both buyers and sellers.