【Foreign cotton dynamics】ICE sharp rise and weakening of real estate cotton reserve price adjustment has little impact

China Cotton Network Special News: According to the feedback of cotton trading enterprises in Zhangjiagang, Qingdao and other places, as the main contract of ICE cotton futures on Monday strongly approached the 120 cent mark, refreshing a new high in ten years, not only 1/1/2/3 months of U.S. cotton, Brazilian cotton, Indian cotton and other inquiries/transactions decreased significantly, but also the decline in bonded cotton stocks in China's main ports also converged significantly, but the customs clearance of cotton remained stable due to the basis difference, and the rise of Zheng cotton lagged far behind that of ICE and a slight increase in shipments.

A cotton company in Huangdao said that due to the seven consecutive rises in ICE futures since October 22, the main contract was pulled from 106 cents / lb to 120 cents / lb in a straight line, not only a large number of ON-CALL point contracts were "closed and locked", but also the bonded cotton and shipping goods signed in October also faced implementation problems, and the seller took the initiative to negotiate to revise the transaction price, delay delivery and even cancel the contract.

An international cotton merchant said that ICE hit a record high in the three major US stock indexes, China signed a contract to purchase 2021/22 US cotton is still strong, energy and chemical, agricultural futures rose "comeback" and other favorable pull, the fund forced to continue, ICE main contract bottom short-term is expected to stand at 120 cents / pound, continue to march to 125 cents / pound.

For the relevant departments to "adjust the 2021 release of reserve cotton in the real estate cotton sales reserve price calculation method", cotton trading enterprises generally believe that the impact of foreign cotton sales is relatively limited, on the one hand, China's cotton textile enterprises, traders inquiry / procurement focus on medium and high quality foreign cotton, and the State Reserve Real Estate cotton to form a high and low match, the two are not direct competition; on the other hand, since the end of October, the cotton market has shown "external strength and internal weakness", the price difference continues to narrow, and the reserve price of real estate reserve cotton sales under the new calculation formula is also upward. Although there is an impact on the sales of low-grade and low-quality cotton in the port in 2018-2020, it can be digested for a short time due to low inventory and relatively abundant capital flow of enterprises.