The US Cotton Export Market In May: Lost And Acquired

According to statistics from the US Department of agriculture, the United States signed a net contract of 86 thousand and 500 tons of land cotton in 2018/19 on May 10-16, a 68.1% increase from the previous week; India, Turkey, Bangladesh and Vietnam were among the top four.

As of May 16th, the US land cotton signed a total of 331.63 tons in 2018/19, completing 107% of this year's forecast (5 years averaging 101%). The US cotton continued to sell quickly and adopted the rhythm of replacing cotton with cotton in 2016/2017, while Chinese textile enterprises and traders were still signing contracts to purchase high-quality and high-grade cotton in 2019/20.

The US cotton export market in May is very close to the "lost east corner" to describe the US cotton export market in May. China and the United States have reached a deadlock in the Sino US trade negotiations (the US side was the first to be in trouble. China was forced to take counter measures). The 2018/19 contract for the year of 2/3 could only be negotiated and postponed to 2019 /20 or the direct destruction. If there were no buyers from Southeast Asia and Turkey, the main contract of ICE futures fell to 65 cents per pound, and a new low since June.

Why do the cotton mills in India, Bangladesh, Turkey and other countries export the "snow in the US cotton exports" instead of "falling in the rocks"?

The author analyzes the following three reasons: first, the May ICE futures violence fell, the main break 70, 65 (intraday low 64.50), the United States cotton spot then plummeted, the advantages of the United States and cotton have been fully reflected.

From the survey point of view, in the middle of May, the price of EMOT/MOT, ME and other cotton CIF and CNF was lower than that of Brazil cotton and West Africa cotton, which was almost the same as that of S-6 1-5/32; the difference between C/A and SM cotton also widened to 7-8 cents / pound, which attracted a great deal of attractiveness to the cotton mills and traders in various countries; two, the collapse of ICE resulted in a rise in the volume of ON-CALL point price contracts signed by buyers from Southeast Asia, Turkey and other countries; three, the dependence of India, Pakistan and other countries on US cotton rose.

In 2018/19, cotton production in India and Pakistan declined sharply, and the quality of lint decreased. Not only did it reduce the export capacity of Bangladesh, Vietnam and China, but also it was difficult to meet domestic demand, so importing American cotton became the only feasible way.

With the escalation of Sino US trade war, it is expected that a large number of orders will be pferred to Southeast Asia, South America and other countries after August, so cotton consumption will be improved in an all-round way. Four, the currencies of India, Pakistan and Turkey will continue to appreciate against the US dollar.