Overseas markets are booming during the eight-day National Day holiday, and the “external market rise during the holiday” scene has once again been staged. In the few days from Trump’s diagnosis to his discharge from the hospital, the U.S. stock market went up and down, driving commodity futures to gain momentum across the board, with agricultural products performing the most prominently. From September 30 to October 8, agricultural products accounted for the top nine of the top ten commodities with the highest price increases.
ICE Cotton Futures – Affected by the threat of the US hurricane “Delta” to the main cotton producing areas of the United States and the overall rise of the US stock market and agricultural products, ICE futures broke through the previous narrow consolidation state and once again achieved an easy upward breakthrough . On September 29, the main ICE cotton futures December contract closed at 65.29 cents on the eve of the long holiday. By the end of the long holiday on October 8, the December contract closed at 67.49 cents, a cumulative increase of 2.20 cents, or 3.37%.
ICAC October Monthly Report – The October global production demand forecast released by the International Cotton Advisory Committee (ICAC) stated that global cotton production in 2020/21 will be 24.6 million tons, a decrease of 330,000 tons from the previous month. Global cotton consumption was 24.34 million tons, basically the same as last month. The increase in cotton production in India will create conditions for increased cotton exports, while the decline in cotton production in Pakistan will increase the demand for cotton imports. Global cotton ending stocks were 21.97 million tons, a decrease of 760,000 tons from the previous month. ICAC estimates that the average Kotruk A index for 2020/21 will be 67.4 cents/pound.
New cotton growth in the United States – The U.S. cotton production report released by the U.S. Department of Agriculture on October 5 shows that as of October 4, 2020, the progress of U.S. cotton spinning was 83%, an increase of 2 compared with the same period last year. percentage points, an increase of 8 percentage points from the average of the past five years. The U.S. cotton harvest progress is 17%, 5 percentage points lower than the same period last year and 3 percentage points lower than the average of the past five years. 40% of U.S. cotton growth conditions are good or above, a decrease of 3 percentage points from the previous week and an increase of 1 percentage point from the same period last year.
U.S. Hurricane – According to monitoring from the U.S. National Hurricane Center, Hurricane Delta is expected to make landfall on the southern coast of Louisiana in the United States this Friday (October 9), and will then move eastward. , bringing 15-150 mm of rain from east Texas to northern Louisiana, southern Arkansas and western Mississippi, with the maximum rainfall reaching 250 mm in some areas. According to the latest statistics from the United States Department of Agriculture, as of October 4, the flocculation rate in the U.S. Delta is close to 100%, and the flocculation rate in the southeastern region is also around 80%. A hurricane at this time will undoubtedly pose a huge threat to output and quality.
U.S. cotton exports – As of the week of September 24, the net contracted volume of U.S. upland cotton in 2020/21 was 53,000 tons, and the contracted volume in China was 12,600 tons. The United States shipped 49,500 tons of upland cotton and shipped 23,900 tons to China. Affected by the National Day holiday, China’s signings and shipments decreased in the week before the holiday. As of the week of October 1, the net contracted volume of U.S. upland cotton in 2020/21 was 40,500 tons, and the contracted volume in China was 6,000 tons. The U.S. upland cotton shipment volume was 32,300 tons, and the shipment to China was 12,100 tons.
International spot market – During the National Day holiday, the international spot market continued to show signs of recovery. In the past few weeks, cotton merchants have generally felt that inventory pressure has been relatively relaxed, so the basis of quotations in most origins has strengthened. One of the reasons is that India’s domestic textile production has resumed and the basis of cotton export quotations has risen rapidly. The other reason is that with the yarn supply in various countries, With the decline of online inventories and the gradual improvement of downstream retail orders, the purchasing demand of various importing countries has begun to increase. Overall, the export sales of various cotton varieties have increased moderately in the past week, and the demand for low-priced cotton is good, but the operating rate of spinning mills is still lower than before the epidemic.
Pakistan – According to statistics from the Pakistan Ginners Association, as of October 2, Pakistan’s seed cotton market volume in 2020/21 was 324,000 tons, a year-on-year decrease of 35%. Affected by this, the spot price of Pakistan Karachi Cotton Association continued to rise to 9,500/maud, a new high this year. At the same time, textile mills continue to import large quantities of foreign cotton.
India – Indian industry research institutions said that because Indian cotton prices are the lowest in the international market, Indian cotton exports have increased significantly recently. At the same time, due to excessive rainfall recently, the moisture in cotton is high, so the launch of high-quality cotton has been delayed, and the new cotton harvest will be delayed by about 15 days than normal. Overall, the increase in export demand and the delay in the launch of new cotton support the rise in Indian cotton prices. Cotton Corporation of India said it will start preparing to launch MSP acquisition business in southern India from October 1. Last week, the Indian Cotton Company continued to increase its bidding price, with S-6 1-1/8 being about 700 rupees/kander higher than the market price. </p
