According to statistics, as of May 12, Zheng Cotton has registered 16,537 warehouse receipts, including 11,285 for Xinjiang warehouses, 5,252 for inland warehouses, and 1,282 valid forecasts, totaling 17,819. Since May 5, Zheng cotton’s warehouse receipts + effective forecasts have fallen for six consecutive years. Last week, the CF2309 contract started a shock callback mode from the annual high of 16,065 yuan/ton, and once fell below 15,500 yuan/ton during the session, but the effective forecast quantity of Zheng cotton did not rebound.
As for the reasons for Zheng Cotton Warehouse Receipt + effective forecast of “six consecutive cloudy days”, industry analysis is mainly affected by the following factors: First, cotton processing companies have very few hedging resources. Judging from the survey, as of mid-May, the sales progress of Xinjiang cotton has reached close to 85%. Lint cotton with high premiums from processing companies has been sold or hedged. The remaining resources in hand can only be used because the discount is too high or does not meet the warehouse receipt registration conditions. Sold in stock form.
Second, the hedging ratio of cotton traders/futures companies is relatively high. Judging from the survey, traders this year have learned the lessons learned in 2021/22 to avoid risks, and most adhere to the “hedging while signing contract” operation method. The hedging ratio generally reaches more than 70%, and the hedging ratio of some cotton companies reaches 90-90%. 100%, not much resource forecast.
Third, some hedging companies have suffered large floating losses and are looking forward to hedging at a high level to increase the average price of warehouse receipts. According to feedback from some cotton-related companies inside and outside Xinjiang, after the Zheng Cotton CF2309 contract exceeded 14,500 yuan/ton (“Double 28” and above indicator machine-picked cotton hedging is profitable), companies continued to make efforts in hedging. When the main contract of Zheng Cotton rose to At 16,000 yuan/ton, the hedging loss has exceeded 1,000 points, and the wait-and-see atmosphere among cotton companies is strong.
Fourth, regardless of the premium, the actual price difference of cotton futures is still large. On May 15, the quotation price of “Double 28” machine-picked cotton in Xinjiang’s warehouse rose to 15,900-16,100 yuan/ton (the actual transaction may have a profit of 50-100 yuan/ton), while the CF2309 contract price is 15,500-15,700 yuan / ton, if delivery in September is considered, hedging companies will need to add 5 months of financial costs, storage fees, insurance premiums, transaction and delivery fees, etc., and the actual price difference between futures and current prices may be 600-800 yuan/ton.
</p
