Since last year, the macro environment at home and abroad has been complex and changeable. The prices of cotton ( 14370 , 25.00 , 0.17% ) and cotton yarn have continued to fall. The price difference between domestic and foreign prices has been deeply inverted. Processing profits even turned negative for a time. The development of the cotton textile industry and corporate operations are facing tremendous pressure. In this context, reporters from Futures Daily learned that the futures market has played an important role as a "stabilizer" and "safe haven" in serving cotton industry chain enterprises to stabilize their operations and avoid risks.
On March 31, the relevant person in charge of the Zhengzhou Commodity Exchange stated at the first Cotton (Zhengzhou) Summit Forum on “Cotton and Cotton” hosted by Guotai Junan Futures and co-organized by the Zhengzhou Cotton Trading Market that currently, more than 80% of domestic cotton Almost all trades refer to futures prices. Cotton futures prices have become an important basis for spot pricing and product situation analysis. Cotton futures warehouse receipts have also become an important part of domestic cotton commercial inventories. Basis differentials have become the mainstream trend in the cotton market.
"The cotton industry chain is relatively long. With the listing and trading of textile derivatives including cotton, cotton yarn, PTA ( 6344 , -32.00 , -0.50% ) , short fiber futures and some option tools, upstream and downstream enterprises in the cotton industry chain can choose The hedging tools are more abundant." Zhang Wentian, general manager of Guotai Junan Futures Henan Branch, said that enterprises in the cotton industry chain have generally accepted and promoted the combination of futures and cash. The unblocking of futures and spot prices will not only help stabilize cotton textile prices, but also help smooth the upstream and downstream industries.
Recently, the disturbance of bulk commodities by overseas macro factors has eased. Driven by multiple favorable factors such as cost support and demand improvement, cotton futures varieties are ushering in a phased recovery market. Wang Xiao, assistant director of Guotai Junan Futures Research Institute, said that 2023 is the second half of overseas interest rate hikes and the first half of China's economic recovery, so it is very important to understand the expected gap. From the perspective of the international market, on the one hand, inflation in the United States is gradually spreading from commodity inflation to service industry inflation. Stubborn inflation and the pace of interest rate increases are one of the focuses of the current market game. In this case, the sensitivity of commodities to interest rate increases It is moving lower, but the pressure from above remains. On the other hand, the U.S. labor market remains resilient, with wage growth well above the trend line and high job vacancies keeping U.S. wage growth at a high level. "Therefore, although the Federal Reserve may gradually suspend interest rate increases, interest rate cuts may be 'distant', and the subsequent performance of employment and inflation data has become a key factor in whether the Federal Reserve decides to cut interest rates." Wang Xiao believes that as long as the Fed's tightening efforts cannot bridge the gap between commodity supply and demand If the rate of contraction is high, it will be difficult to eliminate tightening expectations, and if the tightening expectations cannot be eliminated, they will continue to suppress the demand side. The process of the U.S. economy seeking a soft landing is tantamount to balancing on a tightrope. Therefore, financial market risk appetite is the anchor that determines whether actual economic data is good or bad.
Wang Haoyu, general manager of Haorui Yifan (Beijing) Trading Co., Ltd., said that from the perspective of inventory cycle, the current domestic cotton market destocking cycle has clearly ended, and market participants have gradually turned to inventory reconstruction, but their attitude is cautious. The overseas cotton market has still not completed the destocking cycle, but there have been structural changes in the market's procurement methods, cycles, and flow directions.
"Judging from the latest data from the United States Department of Agriculture (USDA), the USDA continues to lower its inventory forecast. The global cotton ending inventory in January 2023 was 19.396 million tons, a decrease of 185,000 tons or 0.9% from the previous month." Wang Haoyu believes that from the basic Judging from the difference and cotton quality, US cotton will still be the most competitive export variety for the remainder of the 2022/2023 season, and the sales of Australian cotton new flowers will be greatly affected by China-Australia relations.