Zheng Cotton Down 1000 Spot Performance?

Zheng cotton futures continued to maintain a weak shock, the main trading cf2101 contract fell below 14100 yuan / ton, compared with the previous month's high of 15300 yuan / ton, futures have dropped more than 1000 points. During this period, what is the spot price and what is the market performance?

First of all, from the perspective of the selling prices of cotton producers, middlemen and downstream enterprises, the spot price followed the decline, but the decline rate was relatively slow, and the decline was smaller than the futures price. In the middle of October, the price of some 3128 grade Xinjiang cotton was 15500 yuan / ton, but in the near future, it was basically in the range of 14500-14900 yuan / ton. Because the quantity of new cotton sold at low price is relatively limited, most enterprises prefer to calculate the price based on cost. Therefore, most of the machine picked cotton in Northern Xinjiang is 14700-14900 yuan / ton. The situation of spot premium futures has not changed, and high-cost new cotton still has a certain support for the market price.

Secondly, from the perspective of spot purchasing enthusiasm, the price rose in the early stage, and some enterprises started the crazy cotton grabbing mode, but after the price fell down, the operation mentality of cotton mills and traders became more rational. Some textile enterprises use reserve cotton and commodity cotton to coordinate processing cost and maintain stable production. Among them, some enterprises in Shandong, Jiangsu and Zhejiang are more enthusiastic about the Indian cotton and old cotton warehouse receipts in the nearby port warehouses. Especially, the orders and inventory of medium and large-scale enterprises have not increased significantly as market rumors have said, nor have they seen a rapid decline as some operators have worried. It is understood that this is mainly due to the fact that in the past two years, more and more enterprises have continuously enriched their sales channels and product types, and have more complete measures to cope with the possible impact at any time.

Moreover, due to the lack of futures and cash hedging opportunities, compared with last year, cotton ginning enterprises and trading enterprises mostly sold new cotton in the form of spot. Due to the lack of futures for risk hedging, the number of intermediate traders holding goods was significantly reduced compared with previous years. In addition to the inventory of old cotton in the previous year, the circulation of new cotton was sluggish and mainly concentrated at the production end. According to the current situation, this situation may be maintained for a certain period of time.

Compared with the worry of insufficient basic demand, all parties in the market focus more on the U.S. election and the future trend of Sino US relations. Therefore, the cotton market in November may face a choice of direction.