ICE Cotton Prices Continue To Fall

ICE cotton prices lower and lower, continue to decline Yin, this is the two consecutive week of decline, near 60 cents around the gradual stabilization of the market, the adverse factors continue to suppress cotton prices, first, the external market and China factors, the dollar index rose 0.84% this week, the highest close to 95, two consecutive weeks of rise, Monday, the general decline in commodities, the U.S. stock market decline is also larger, CBOT grain prices on Tuesday after a sharp rise in the high and then fell back, China's cotton reserves, Zheng cotton futures stopped rising and falling, these factors have made the international cotton prices under pressure.

Two is announced by the US Department of agriculture.

The monthly report is not favorable for us cotton. In May, the production and sale inventory data of monthly supply and demand report had a certain change compared with that in April. In the United States, in the year of 2015/16, the US cotton output forecast was increased by 20 thousand to 12 million 890 thousand packages, and the inventory estimate was increased by 500 thousand to 4 million packages at the end of the year, and the export estimate was reduced by 500 thousand bags to 9 million packages. The yield was slightly raised because the harvest area was also slightly increased, while the export forecast dropped sharply.

There was a corresponding increase; in 2016/17, the estimated yield and yield per unit area increased, and the output was estimated at 14 million 800 thousand bales, which is much higher than the current year. The export forecast is 10 million 500 thousand packages, and the inventory estimate is 4 million 700 thousand bales at the end of the year. The increase in export volume does not offset the increase in production, resulting in an increase in inventory at the end of the year. The output of India's 2015/15 is estimated to remain unchanged at 26 million 800 thousand packages, and the 2016/17 year is 28 million packs.

In the week of May 5th, the US Department of agriculture's report on export sales showed that, in the week of May 5th, cotton exports in the US 2015/16 year were net sales of 103500 packs, an increase of 69% over the previous week, a 38% increase compared with the previous four weeks, and the shipment of 171100 ports in Turkey, Brazil and Vietnam, which were reduced by 38% compared with the previous week. The average exports to China, Turkey and Vietnam were mainly pported to mainland China, Vietnam and Vietnam. The overall good data support the cotton price to stop and rebound, but whether the US cotton exports could continue to increase and the market was worried, and the Chinese cotton reserves were put in and traded well, which would also reduce the number of imported cotton. US cotton weekly sales increase to a certain extent.

In China, the output forecast for 2015/16 has not been changed by 23 million 800 thousand packages, and the import forecast has been reduced by 750 thousand packets to 4 million 250 thousand packages. The inventory estimate has been reduced by 700 thousand packages to 63 million 320 thousand packages at the end of the year. However, the inventory data in China are better. However, from the comparison of these data, we can see that the main reason for the decrease in inventory is the decrease in import volume, and the actual demand for cotton in China has not improved significantly. In 2016/17, China's output is estimated at 22 million 500 thousand packages, and imports are estimated to be 4 million 500 thousand packages, with 56 million 720 thousand stocks at the end of the year.

In the end of the year, 102 million 840 thousand cotton inventories were forecast for the end of the year in 2015/16, 102 million 220 thousand at the end of April, 964 billion 800 million at the end of 2016/17, and 110 million 800 thousand in the year of 2016/17, an increase of 1.6% over the same period.

And consumption in Pakistan has increased.

From a global perspective, cotton production exceeds consumption, and carry over inventory has declined, and supply and demand situation has improved. However, the fundamental slip of the US is unfavorable for both recent and long-term cotton prices, which is the main reason for the weakening trend of US cotton.