Cotton Sales Downward And New Cotton Sales Increased Concerns

Yesterday, ICE cotton futures fell more than 1%, the lowest level in more than a month, mainly due to the suspicion of the Sino US trade agreement. ICE's main cotton contract closed down 1.07 cents in March, down 1.6%, and the settlement price was 64.28 cents / pound, the largest percentage decline in more than a month. Today, Zheng cotton main CF2001 contract continued to drop, hitting a low point of 12580 yuan / ton, shorting obviously. The industry speculated that in recent days, domestic and foreign cotton futures were down, or because the Sino US trade negotiations had encountered a barrier again. There was a news from foreign media that the first stage trade agreement between China and the United States was postponed to the end of next year.

The price of cotton fell again, bringing a more direct blow to the cotton ginning enterprises currently in full swing. The price of seed cotton has gone up this year, and the processing cost has been increasing. However, most of the newly processed lint is still on the way to processing, or is still in the professional repository. With the end of seed cotton sale, the processing cost of cotton ginning plants has been solidified, futures prices have dropped, and the price of lint market will keep up with the downward trend, which will undoubtedly aggravate the pressure of enterprises.

According to the feedback from Xinjiang ginning factory, the processing cost of this year's enterprises is quite different. Generally speaking, the early processing cost of the enterprise is relatively large. The average processing cost of the machine picked cotton in the northern Xinjiang is 11200-11500 yuan / ton, while the later processing cost is increased to 12800-13200 yuan / ton. The price fluctuation of the hand picked cotton in the southern Xinjiang is very low after the centralized listing. The average processing cost is 12600-13500 yuan / ton. But most enterprises say that the current downstream demand is not strong, the new cotton spot is hard to sell, and futures prices are on the spot.

Apart from the simple price factors, the quality of newly processed lint in the territory is generally less than that of last year, and it also brings difficulties to cotton sales. Kuitun, Jinghe and other enterprises in Northern Xinjiang feedback, this year, more than 29 of the proportion of resources significantly reduced, or by the initial growth of cotton low temperature, and summer temperature is too high. In southern Xinjiang, except for the Bazhou area, the feedback situation in Akesu and Kashi is not very optimistic. Besides the length and strength, it is generally not as good as last year, and the horse value is high, which seriously affects the lint index. A person in charge of a business in Yuepuhu, Kashi said that the length of 29mm was larger in the past years, but this year it is basically 28mm's resources. Whether it is in the late stage or in the stock market, there will be substantial quality discount, and the revenue will definitely decrease.

As of November 20th, 2 million 880 thousand tons of new cotton were processed and 2 million 330 thousand tons were tested. The supply pressure of new cotton has been gradually manifested. The progress of Sino US trade is still the dominant factor affecting the trend of the cotton market. Under the condition of the limited digestion of the downstream cotton and the decline of the quality of some new cotton, how to resist the risk of the cotton mill and get through the market safely becomes the key. In the aftermarket, cotton production enterprises lock in appropriate revenue, do not blindly catch up with high prices, and choose funds in a variety of ways, such as entering and storing, selling spot, spot price, or hedging, and so on.