The Summit Has Failed To Change The Status Quo, And The International Cotton Price Will Continue To Bear Pressure.

The first meeting of the US dollar meeting last weekend is good for the market, but even rising is a short-term behavior. After all, the market must see the final concrete agreement, and the fundamentals of cotton, especially in the next year, are far from being able to support prices.

As China and the United States return to the negotiating table, ICE cotton futures are expected to get a boost. ICE futures and China zhengmian futures rose sharply during the Asian trading session on Monday, but soon lost momentum. Although Trump promised not to impose tariffs on surplus Chinese products, China still imposed a 25% tariff on US cotton. Although China has promised to buy large quantities of US agricultural products, the list of purchases has not been released. This statement will not bring any practical results.

With the slowdown of textile and garment exports, China's cotton consumption will remain depressed for some time. The trade war may lead to international procurement turning to other countries, so the prospect of cotton yarn consumption is not good, and China's cotton yarn imports will also remain at a relatively low level. As a result, cotton demand in cotton exporting countries such as Vietnam, India and Pakistan will still be suppressed.

In addition, the next year's global cotton production is expected to increase significantly, and consumption growth will not keep up. Therefore, the ICE futures contract in December may not break through the consolidation interval of nearly three months.