According to statistics, as of November 3, Zhengmian had registered 2,144 warehouse receipts, including 199 new year warehouse receipts, and a total of 2,391 warehouse receipts + forecasts. Zhengzhou Commodity Exchange added new cotton delivery warehouses this year (the number of Xinjiang delivery warehouses reached 12, basically covering all Xinjiang cotton areas). However, judging from the growth of warehouse receipts and effective forecasts, the number of registrations did not meet expectations.
What factors are currently restricting the registration of Zheng Cotton warehouse receipts in 2023/24? Industry analysis mainly has the following three points: First, the comprehensive synthesis of lint cotton in the warehouse of Xinjiang cotton processing enterprises and the main contract of Zheng cotton are relatively “inverted”, and the generation of warehouse receipts is not attractive to enterprises. At present, the average purchase price of seed cotton in some enterprises is 7.6-7.8 yuan/kg, and the cotton seed is calculated at 2.9 yuan/kg. The comprehensive cost of lint in the supervision warehouse has reached more than 17,200 yuan/ton (gross weight, including short-term dumping, warehouse “lump fee”, 2 Monthly financial expenses), and since late October, the CF2401 contract price has continued to fluctuate in the range of 15,500-16,300 yuan/ton, and processing companies have no chance to hedge.
Second, the spot sales quotation of Xinjiang cotton continues to be higher than the lint cost, and companies have turned to “short, flat and fast” operations. Judging from the survey, since October, with the main contract of Zheng cotton falling from 17,815 yuan/ton to 15,475 yuan/ton, the price difference between the spot sales quotation of Xinjiang regulated lint cotton and the lint cost of cotton processing enterprises has gradually dropped from more than 1,000 yuan/ton to 300-500 yuan/ton. At present, the two are basically the same, but cotton companies are not losing money. From November 4th to 6th, the price of cotton picked by Xinjiang warehouse’s “Double 28” machine was quoted at 16,700-17,100 yuan/ton. Taking into account the difference in gross weight and metric weight, the ginner still did not lose money.
Third, out of risk aversion, financial institutions require companies to repay loans in full and on time. Cotton processing companies consider that the delivery periods of contracts such as CF2401 and CF2403 are relatively long, which is not conducive to quick payment collection. In addition, due to strong expectations for production cuts in Xinjiang in 2023/24, there is a strong bullish sentiment about cotton futures, and ginning companies are worried that hedging orders will be manipulated by funds, resulting in floating book losses.
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