“A feather indicates the direction of the wind, and a grass indicates the current flow.” Judging from various news coming out of the market in recent days, it seems that they are all conducive to rising cotton prices. The author also believes that the Zhengmian K-line has achieved a breakthrough and is more likely to be able to stand firm and continue its upward trend. However, the upward space is limited because once the trend is formed, it will not be easily reversed and it will take time to brew.
Whenever cotton sowing in Xinjiang is completed, the weather will become the main factor affecting the rise and fall of cotton prices. This is true every year, and the results are proven time and time again. According to a report from China Cotton Network yesterday, strong winds and dusty weather occurred in Aksu region of southern Xinjiang and Jinghe County of northern Xinjiang, which had a certain impact on fragile cotton seedlings. Some cotton fields that were severely affected need to be replanted or reseeded. Judging from Xinjiang’s annual weather history, extreme weather will occur more or less during the cotton growth stage, such as strong winds, low temperatures, hail, etc. As of now, the weather in Xinjiang during the same period should be better than in previous years. At this time, it is difficult to rely on speculation of cotton disasters to boost cotton prices. However, the author believes that judging from the weather warning information that has appeared in various parts of the world, the weather performance at home and abroad this year is indeed somewhat abnormal. We must do a good job Be prepared for climate anomalies at any time.
Another big news this morning is that Liu He, the Chinese leader of the China-U.S. Comprehensive Economic Dialogue, had a phone call with U.S. Trade Representative Lighthizer and Treasury Secretary Mnuchin at request. Both sides expressed that they should strengthen macroeconomic and public health Cooperate and strive to create a favorable atmosphere and conditions for the implementation of the first phase of the China-US economic and trade agreement and promote positive results. Both parties agreed to maintain communication and coordination. The trade between China and the United States is of vital importance to each other. The economic and trade negotiations between the two sides are progressing smoothly, and the impact on domestic cotton prices is self-evident. After all, the United States is my country’s largest textile and clothing export market.
In addition, my country’s trade export data in April was much better than expected. In addition to the substantial growth in exports, China’s imports of iron ore, crude oil, coal, natural gas, soybeans and other commodities increased from January to April. These signals It shows that the domestic economy is recovering.
Boosted by the above factors, the rise in cotton prices is naturally justified. However, the author is not optimistic about the height of the increase, because the textile consumption data still does not show signs of rebound. According to customs statistics, from January to April 2020, my country’s cumulative exports of textiles were US$37.312 billion, a year-on-year increase of 2.9%. The increase was mainly due to the surge in exports of masks; cumulative exports of clothing were US$29.309 billion, a year-on-year decrease of 22.3% (1-3 The monthly decline was 20.58%), and the decline further increased.
The decline in the textile PMI index has also restricted the rise in cotton prices to a certain extent. It is reported that the manufacturing purchasing managers index in April was 50.8%, down 1.2 percentage points from the previous month. The National Bureau of Statistics interpreted that among the 21 industries surveyed, the PMI index of 9 industries such as food and alcoholic beverages, refined tea, automobile manufacturing, and petroleum processing was higher than that of the previous month, and the PMI index of 12 industries including textiles, chemical raw materials, and papermaking and printing The index is lower than last month. Among them, the new order index of the textile, textile and apparel industry is lower than the production index, and the recovery of industry demand lags behind production.
In previous articles, the author analyzed that cotton prices will maintain a range-bound trend. Boosted by news in the short term, it is normal for cotton prices to surge upwards. After all, they are at a low level. The price already has rebound momentum, but it is still difficult to form a reversal trend.
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