In recent three years, great changes have taken place in Xinjiang cotton trade mode, from the previous spot trading to futures hedging + point price trading. This is due to the fact that since 2017 / 18, Zheng Shang started to set up a futures delivery warehouse in Xinjiang, and adjusted the warehouse upgrade discount in Xinjiang to 0, that is, the benchmark price zone of cotton futures was adjusted to Xinjiang. In the past three years, the number of delivery warehouses in the region has gradually expanded from three to eight at present. Another potential reason for the adjustment of trade mode is that the sales progress of Xinjiang cotton is gradually lengthening. Enterprises can avoid the market risk in a long sales period by choosing the right time to hedge.
In the centralized supply stage of Xinjiang lint, the number of registered warehouse receipts of Zheng cotton increased year by year. In the past year of 2019 / 20, the number of registered warehouse receipts was significantly higher than that of the same period of last year. On February 24, 2020, the total number of registered and effective forecast warehouse receipts of Zheng cotton reached 42890, almost double the peak of the previous year, with 1.72 million tons of lint converted, accounting for 30% of the total cotton production of that year Xinjiang cotton accounted for 96%.
Looking back on the relevant data of Zhengzhou cotton in recent three years, we find that in addition to the above situation, there are some correlations between the warehouse receipt and the disk price of Zheng cotton
The peak of registered warehouse receipts is coming earlier and earlier, which is closely related to the market price operation and the change of basis, as well as the change of sales habits. When the futures price rises to a high level and the basis is low, the registered warehouse receipt reaches the peak. In the last two years of these three years, the peak of registered warehouse receipts appeared about one month after Zheng cotton price reached the annual relative high and the basis reached the annual low point (there are also views that due to the great pressure of the market real offer, the price has gradually dropped since then.) At the same time, more and more enterprises hedge risk as soon as possible when the price is right.
Last year, domestic cotton prices were low, and a large number of cotton entered the futures market for hedging. This year, the new cotton will be on the market soon, and all circles have strong expectations on the market price trend, so the hedging rhythm of enterprises should be paid attention to.