What Are The International Markets In 2019/20?

Entering the July, as the cotton growing and growing in the northern hemisphere gradually "settled", the Sino US trade negotiations "cut and run", and the Gulf conflict escalated, and the US and European trade "rivalry" and other factors gathered, the global cotton market in 2018/19 has been hard to set off under the bad pressure of consumption decline and tariff barriers. In the absence of basic cotton and capital, the main contract of ICE has failed 70 times in several tests.

I believe that the Sino US leaders' meeting in Osaka turned out to be a neutral preference. Although the United States suspended tariffs on imports of $350 billion, the premise was that China should import large quantities of American food and agricultural products. It is the common desire of both sides to restart trade negotiations. From the perspective of cotton supply and demand, the external market environment and the global enemies of the Trump administration, the main force of ICE will still have a "bottom touch" in the 65-70 cents / pound body before the end of August. Even if the phase is broken up by 70, it will be difficult to keep many funds and funds.

However, I am more optimistic about the global cotton market in 2019/20, and the hope of ICE returning to 75 or even 80 cents / pound is quite large.

First, the cotton growing area and growth rate of the three cotton producing areas in the northern hemisphere are not ideal, lower than expected. 1, the cotton growing area in India is a serious problem. India Cotton Association statistics, as of June 25th, India cotton planting in 2019 only completed 15%, compared to 90% in the same period last year. Due to the unclear prospect of the monsoon rain, 85% of India's new cotton has not been sown, so it is very difficult to predict the output of the new year. Among them, Gujarat, Maharashtra and central are likely to replant other crops in large areas. 2. According to the US Department of agriculture, the sown area of US cotton in 2019 was 13 million 720 thousand acres, a decrease of 2.7% over the same period last year, of which the Pima cotton area was 275 thousand acres, a decrease of 9.9% compared with the same period last year. The cotton growth in Xinjiang cotton region of China was weak in the same period. According to the survey, the growth of cotton in southern Xinjiang, Akesu, Korla and other southern regions of Xinjiang has not been optimistic since late middle 6. The growth and development indicators still lag slightly behind the same period last year, and the average plant height, fruit number and bud number are relatively poor.

Second, the global monetary policy is facing major adjustment, loose, inflation or the main tone, and commodity futures are rising. Recently, US economic data have been weakening, including durable goods orders and initial unemployment figures. The market is expected to cut interest rates by 100% in July, and the 50 base point cut is less than 20%. Last week, Federal Reserve Chairman Powell and the Federal Reserve Chairman of the Saint Louis fed Brad hinted that they would cut interest rates by 25 basis points in July. In the European Union, Australia, Japan and South Korea and other developed countries, the Central Bank of China will continue to adopt targeted reduction and quasi reduction in the case of "currency drain".

Third, the substitution of cotton in the southern hemisphere to the US cotton has dropped sharply, and the US cotton export has become the "vane" of the market again. Judging from the feedback from all sides, in 2019, the output of Australia cotton fell by more than 50% over the same period last year, and the indexes such as length, horse value, strength and so on declined significantly. The substitution of C/A, M/E and other products weakened. The export did not have the ability to compete and compete with the United States and cotton in all directions. Brazil cotton was likely to "lose its inside and outside Jin Yuqi" - the output increased considerably, but because of a series of conditions such as purchase, cotton ginning, warehousing, transportation, shipping date and so on, it lost the opportunity to continue to challenge us cotton. Moreover, because of the high cost of planting and other links in Brazil cotton, the price of new cotton and American cotton in 2019/20 is also very difficult.