On March 6, a day that a cotton spinning company had been looking forward to for a long time, the rotation of cotton reserves finally started as scheduled!
As we all know, when cotton prices are in chaos, cotton reserves are the “life-saving straw” that textile companies have been longing for. However, according to the editor’s understanding, among the first ten sales of cotton reserves, seven of them went up, including last year. I remember that in July last year, the price of cotton rose so high that it was so crazy that both textile companies and traders were stunned. Although the price of cotton fell after the policy of delaying the sale of reserves, there was a long silence after a month. Cotton has reached its daily limit again! So will this year’s round reserve prices increase as they sell more and more like last year?
The answer is: Yes!
Early in the morning on March 6, Zheng Cotton’s main contract 1705 opened at 15,970 yuan/ton. In less than half an hour, it rose to 16,225 yuan/ton. This is the rare time in the past half month that Zheng Cotton has exceeded 16,000 yuan/ton. At the resistance point, at 11:17, the 1705 contract reached a high of 16,450 yuan/ton, an increase of 2.88%. The editor kept a close eye on the market and watched the cotton price “singing all the way”, and felt incredible in his heart.
Affected by the rise in Zheng cotton futures, the cotton spot market also reported a slight increase. The price of machine-picked cotton in Beijiang was 15,800-15,900 yuan/ton, but the overall inquiry was sparse. On the first day, the auction and storage were mainly focused on the auction.
Although this is not the first time this has happened, relevant data shows that since 2008, domestic cotton reserves have been released 10 times. Among them, 7 times the price of cotton increased and the price of cotton fell. Three times, the probability of cotton prices rising is significantly greater than the probability of falling. The most recent release of cotton reserves occurred from May to September 2016, with a total of 2.66 million tons of reserve cotton released. From April to September last year, the cotton price index in the spot market rose from 11,700 yuan/ton to about 14,900 yuan/ton, and the futures price rose from 10,000 yuan/ton to about 16,000 yuan/ton. The futures rose by nearly 60%.
From this point of view, the rotation of cotton reserves does not mean that cotton will fall in response. After all, there is still financial speculation. During the rotation period, not only textile companies are eligible to bid, but traders are also eligible. In this way, if traders rush to buy And hoarding, the market phenomenon of “the more the state reserve cotton is auctioned, the higher the price” is also expected.
It is understood that all 15,100 tons of cotton reserves for the 2016/17 year were traded during the first trading session on March 6. The highest transaction price was 16,340 yuan/ton (for 2012 resources, the price increase was 1,360 yuan/ton). Judging from the transaction situation in the morning, the highest price increase for a single bundle was 2,740 yuan/ton, and the lowest price increase for a single bundle was 520 yuan/ton. Judging from the annual resource transaction situation, the highest resource transaction price in 2011 was 15,310 yuan/ton, and the maximum price increase was 1,520 yuan/ton; the highest resource transaction price in 2012 was 16,340 yuan/ton, and the maximum price increase was 2,740 yuan/ton; the highest resource price in 2013 The transaction price was 16,300 yuan/ton, and the maximum price increase was 2,460 yuan/ton.
According to statistics, a total of 30,200 tons of cotton reserves were put up for auction in the first two sessions on the first day of this year’s cotton reserve rotation. The China Cotton Reserve Management Corporation is scheduled to be listed for trading in the first session on March 6. The reserve cotton weight is 15,114.226 tons, of which 36 bundles need to be stacked and shipped out. In the second section, the weight of cotton reserves listed for trading was 15,055.131 tons, of which 41 bundles needed to be stacked, totaling 30,169.357 tons.
To sum up, as the price of Zheng cotton has been running at a high level recently, and textile companies are waiting for the reserve cotton to be released from the warehouse, and the enthusiasm for purchasing raw materials is insufficient, it is expected that the price of Zheng cotton may rise in the early stage of the release of reserve cotton. Based on the current supply and demand pattern, we Reserve cotton is needed to make up for the gap between supply and demand, but the current stage does not support the cotton market to break out like the bull market in 2016. Especially in the first quarter, there is greater pressure on Zheng cotton, so there is still a possibility of a decline in the later period.
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