It is understood that although the main ICE cotton futures contract continues to rise and the USDA monthly report once again lowered the 2019/20 US cotton production and ending stocks, the RMB quotation of foreign cotton for port customs clearance continues to stabilize, with the CF2005 contract testing 14,500 yuan many times. / ton without success, traders’ confidence has been shaken, and the pace of quotation increases has slowed down (basis quotation).
January 14-15, Qingdao, Zhangjiagang and other ports 2019 M 36 (strong 28GPT) The net weight quotation of Brazilian cotton is 14,400-14,500 yuan/ton; 2018/19 SM 1-1/8 (strong 28GPT, produced in Benin, Mali, Burkina Faso and other places) West African cotton, M 1-5/32 Indian cotton Net weight quotations are 14,200-14,300 yuan/ton and 13,900-14,050 yuan/ton respectively.
A cotton company in Zhangjiagang said that since January, the “basis difference” quotations of Brazilian cotton and Zheng cotton in 2018 and 2019 have risen rapidly; coupled with the 1% tariff in 2020 Import quotas are gradually being issued, and textile companies and traders are making inquiries and receiving goods directly from international cotton merchants or foreign export companies. It is expected that after China and the United States sign the first phase of the trade agreement on January 15, US cotton will be launched. In the “buy, buy, buy” mode, the popularity of Brazilian cotton and Australian cotton shipments at the port has declined significantly; while Indian cotton and West African cotton in 2018/19 are slightly more cost-effective; in addition, traders’ inventories are generally low and they are eager to clear their stocks, so there is more room for negotiation. Large, so there are some deals before the holiday. In addition, inquiries and transactions for 2018/19 Sudanese cotton and Mozambique cotton with low quality and low price, such as SM 1-1/32 and SM 1-1/16, were relatively good.
Some cotton traders judge that the benefits of Sino-US negotiations before the Spring Festival have basically been released; there is a lack of change in global cotton fundamentals, coupled with the fact that Chinese cotton textile mills and traders are on holiday one after another Rest, so ICE is likely to enter a state of consolidation and oscillation, and it is not ruled out that it will fall back below 70 cents/pound for a short time; but in the medium and long term, we will continue to hold a bullish position, and the main contract will not open the target of 75 cents/pound or 78 cents/pound. Therefore, the quotation of foreign cotton in port bonded, spot or February/March shipping is very calm in operation. The profit margin of US cotton, Brazilian cotton, West African cotton, etc. is only 0.015-0.025 cents/pound; while the RMB quotation of customs clearance foreign cotton is There is a high probability of a slight decline as the main contract of Zheng Cotton reaches its peak and falls back. However, because of the high expectations for the cotton market in 2019/20, the reluctance to sell before the holiday and the anti-drop sentiment dominate. </p
