ICE US Cotton Rose After The Mid Autumn Holiday, Zheng Cotton Market Is Expected To Increase.

Zheng cotton's rebound has been limited in recent two weeks, and the main 2001 contract has been blocked by 13000 yuan / ton. However, in the midst of the mid autumn holiday, cotton market is ushering in a new good turn, that is, the Sino US economic and trade negotiations are ushering in a new turning point. China's purchase of US cotton is expected to be strengthened, and the downstream demand is expected to be stronger than expected. The good news even covered the bad impact of the US cotton sales report and the USDA monthly report, prompting a rise in ICE cotton and a jump of more than 4% on Thursday and a slight rise on Friday, the highest level since August. After the festival, Zheng cotton will usher in a rising market. Although there will not be a trend increase, cotton prices are expected to remain strong before China and the us negotiate again.

Sino US economic and trade negotiations have been favorable

China is the largest cotton consumer in the world and the biggest buyer of US cotton. Sino US economic and trade relations are tense, and cotton has become one of the most obvious commodities. Since April this year, the trend of cotton price is highly related to the trend of Sino US economic and trade relations. The impact of Sino US economic and trade relations on cotton prices is bilateral: Sino US economic and trade negotiations are moving towards conciliation, and China will increase the intensity of purchasing US agricultural products, which will be obviously good for the export of cotton in great pressure. At the same time, the United States is expected to exempt or reduce the new import tariffs on imported textiles to China, which is conducive to the export of Chinese textile products. The result of the negotiations is poor and the impact is bilateral.

Recently, China and the United States are about to resume the thirteenth round of negotiations, and cotton prices are starting to rebound. During the long holiday period, the good trade between China and the United States continued to enlarge. After the United States has decided to adjust the tariff measures imposed on China's exports to the United States to be implemented in October 1st, China also announced that it would eliminate tariffs on the purchase of agricultural products in the United States. US cotton has been double pressed by exports and inventory. It has dropped to a new low in 3 and a half years. Under the promotion of favorable factors, US cotton has ushered in the biggest weekly weekly rise in a year, or 6.3%.

Cotton market related data is empty

During the Mid Autumn Festival holiday, two reports were released in the cotton market, and all of them were empty. According to the US cotton sales report, as of September 5th, cotton contracted 17 thousand and 800 tons in 2019/2020 and shipped 38 thousand and 900 tons, down 19 thousand and 300 tons and 15 thousand and 100 tons respectively. USDA's monthly report shows that global production has been cut by 150 thousand tons to 27 million 190 thousand tons, of which the United States has cut 140 thousand tons to 4 million 760 thousand tons. However, the positive reduction in output was totally offset by the downside of demand, and global demand fell 290 thousand tons to 26 million 510 thousand tons, of which China cut 140 thousand tons to 8 million 600 thousand tons. In the end, global end stocks rose 280 thousand tons to 18 million 230 thousand tons, of which India raised 450 thousand tons. In addition, inventory consumption increased by 1.79% to 68.79%.

The picture shows cotton 2001 contract daily line.

To sum up, Sino US economic and trade relations have eased up, and US cotton has soared. The final rise in cotton prices still depends on the actual outcome of negotiations. The survey found that the start and sale of downstream fabrics and clothing started better since July, but until recently, it fell to 30% in the peak season. Therefore, the recent trend of Zheng cotton should be treated with a staged rebound.