Since late November, ICE’s main contract has continued to consolidate within the 64-67 cents/pound box, and it is difficult to test 68 cents/pound and 70 cents/pound upwards; downwards, US cotton exports have been strong, and the United States The good performance of economic data in the third quarter is supportive; coupled with the Thanksgiving holiday, both bulls and bears have temporarily stopped their activities and are waiting for direction guidance.
Some institutions and international cotton merchants believe that the short-term factors affecting the trend of ICE include the following four points:
First, although the Sino-US trade negotiations have once again released positive signals, they have made little substantive action, and there is great uncertainty as to whether the first phase of the agreement can be successfully signed. Recently, U.S. President Trump signed the Hong Kong Human Rights and Democracy Act, and U.S. ships once again trespassed 12 nautical miles on the islands and reefs in the South China Sea, putting the prospects for Sino-U.S. negotiations into doubt;
Second, self-inflicted On December 2, China will start the purchase and storage of 500,000 tons of medium and high-quality Xinjiang cotton. The impact on external markets such as ICE needs to be observed. Although the arrival of 500,000 tons of Xinjiang cotton has reduced the supply of lint cotton in the world and China in 2019/20, considering the adoption of a “bidding ceiling” (i.e. downward bidding), the purchase price of Xinjiang seed cotton has declined after November. In addition, Objective conditions such as the relatively high sales pressure of spinning cotton in October/November may put pressure on the market prices of Zheng cotton and ICE;
Third, the short-term Sino-US deadlock is difficult to break, and the United States in December Whether there will be a comprehensive increase in tariffs on goods imported from China on the 15th has become the focus of investors and cotton-related companies;
Fourthly, considering the time issue, Chinese companies will continue to cancel the 2019 /20 US cotton contract may be extended to 2020/21 through negotiation.
Judging from the quotations of traders in Qingdao, Zhangjiagang and other places, the shipping schedule of US cotton in 2019/20 is concentrated in December/January/February, and the EMOT/MOT and ME varieties are Main (C/A, ALACA many), levels 31-4 and 41-4 account for a high proportion. Textile companies in Henan, Jiangsu, Shandong and other places said that not only is the grade of U.S. cotton scheduled for shipment before February not high, but the commodity inspection breaking strength is generally 28GPT and below. Compared with spot and bonded Brazilian cotton, there is no advantage in quality or U.S. dollar quotation. .
Currently, China’s main port bonded and shipping schedules for 2019/20 and 2018/19 US cotton are only quoted in US dollars (no RMB price), and China has imposed additional tariffs on US cotton. As the cotton import quota within the 1% tariff has not yet been cancelled, and there are very few leases and transfers, sellers have no incentive to take the initiative to clear foreign cotton. </p
