Uncertain Factors Of Sino US Trade: Contradiction Between Cotton And Air And Intensifying The Critical Period Of Cotton Market Entry

In May 5th, the central cotton reserve was officially launched.

From the market price increase situation, we can see that the high cost performance reserve cotton is still favored by the market.

The industry's confidence has been boosted, and it also reflects that the downstream demand is getting warmer.

However, on the morning of May 6th in Beijing, President Trump issued a tweet, dissatisfied with the progress of trade negotiations, and will continue to raise tariffs.

As a result, the price of domestic and foreign cotton futures fell down, and the tension of the market heated up for a while. The uncertainty of Sino US trade relations once again attracted the attention of the market.

On the other hand, entering the May, the domestic cotton sowing was basically over. In some parts of Xinjiang, the extreme weather occurred in succession, and cotton city entered a critical period.

Here is a brief analysis of the short term factors that affect the direction of cotton market in the near future.

Profit factors: first, Xinjiang agricultural eight division, Nong Yi Shi, Sha Ya county and the county of Ping county and other places all suffer hail disasters in varying degrees. At present, farmers are taking remedial measures according to the disaster situation, and some of them can not replant cotton fields for rebroadcast.

In addition, the recent wide range of continuous rainfall within the territory, the temperature has also declined, meteorological departments in Akesu and other places issued a frost warning.

If the temperature has not yet recovered significantly before mid - term, it will result in a wide reduction in yield of replanting cotton fields.

Second, according to the current cotton reserve price increase situation, Xinjiang cotton price increase range in 1300-1600 yuan / ton, real estate cotton price increase range in 1000-1100 yuan / ton, enhanced the upstream and downstream cotton business operation enthusiasm, to the current domestic commodity cotton price also provides strong support.

Negative factors: domestic cotton business inventories are still in the same high position.

At the same time, as of May 7th, the number of warehouse receipts of Zheng cotton reached 19616, 2793 effective forecasts, and accumulated Warehouse Receipt Inventory of about 896 thousand tons.

In addition, the additional 800 thousand tons of imported cotton quasi tax quotas and 1 million tons of cotton reserves will effectively increase the supply of the market. Under the premise that the demand of downstream textile enterprises has not improved significantly, buyers' mentality remains cautious.

Uncertain factors: the uncertainty of Sino US trade relations can be turned into profits or bad factors at any time, which is a trend for the current cotton market.

According to the latest news from the Ministry of Commerce, the Chinese leader Liu He will visit the United States on from May 9th to 10th and hold the eleventh round of consultations with the US side on economic and trade issues at the invitation of the US trade representative, lettse, and finance minister Mnuchin.

The success or failure of the negotiations will again cause a big concussion in the cotton market.

Therefore, at present, the contradiction between air and space factors is intensifying. It is suggested that the industry should pay close attention to relevant news and formulate strategies to deal with it.