Market Dynamics: The Price Of Seed Cotton Is Expected To Decline After The National Day

New cotton acquisition is expected to open high and go low. This year, the ginning plant may start weighing against the panel, but the formation of the mainstream purchase price later is the result of the game among all groups in the industry, which in turn affects the driving panel.

Before the National Day holiday, because the supply of high-quality cotton from old cotton was tight, the basis was high, and a large number of new cotton had not yet been harvested and listed (the excessive rainfall in September delayed the listing of Xinjiang cotton), new cotton sets were less guaranteed. Under the influence of the external macro profit atmosphere, Zheng Mian was able to rise rapidly, and the opening price in some areas of Xinjiang was high at the end of September.

However, after the National Day holiday, a large number of new cotton will come into the market. In combination with the expected increase in Xinjiang's output this year, while the downstream textile business continues to be poor, demand is weak, and textile enterprises have limited tolerance for raw material prices, which means that if the price is high after the purchase and processing of ginning plants, it is expected that the goods will be sold slowly. However, ginning plants are very cautious this year, In recent years, their losses and capital constraints have made them less willing and able to bear risks. They are expected to focus on the low inventory strategy of fast purchase, fast processing and fast sales. If the sales are slow, they are bound to reduce the price and take the goods.

Therefore, we expect that this year's purchase price of seed cotton may rise, fluctuate and fall, which will further drive down the market. The average value of the purchase and processing costs and the upside down of the market is expected to further reduce compared with the previous two years. If the futures are at a high level, it will inevitably bring a lot of hedging pressure; The basis difference of new cotton is expected to be high before and low after.

The pressure of centralized listing and supply of new cotton at different stages is great. New cotton will be harvested and listed in the fourth quarter. Considering that ginners have strong risk aversion and are unwilling to hold a large number of stocks, large growers have experienced a large loss of processing in the past years, and their reluctance to sell has weakened this year, downstream textile enterprises have limited cotton to digest in the short term, and the lack of new orders makes them less willing to stock up raw materials The new cotton season is now upside down and the expected basis is high in the front and low in the back, or it will also limit the purchase pace of traders, which means that about 6 million tons of Xinjiang new cotton is centralized on the market while the downstream undertaking is insufficient, which may bring downward pressure to the market.

The downstream textile peak season is not prosperous, and the industry confidence is insufficient. At present, domestic textile industry has entered the traditional "golden nine and silver ten" peak season. Although the marginal improvement of orders has occurred since August, the characteristics of the peak season are not obvious, and "golden nine" has failed. Judging from the orders and inquiries of downstream textile factories, "silver ten" may not give great expectations. Textile enterprises, especially those in the mainland, continue to have poor production profits and lack of industrial confidence, It will restrict its ability to bear the price of raw materials. The next time to look forward may be the market before the Spring Festival.

Outflow pressure of obsolete warehouse receipts. 23/24 The remaining warehouse receipts of the year must be written off at the expiration of the contract in November. It is difficult for these resources to flow out, and it is necessary to give a sufficient discount. The contract in November is approaching its expiration, which will face greater pressure, and the forward contract may be dragged down.