ICE Futures Close To 60 Cents / Pound Cotton Price Confusion Outside The Port

According to Cotton Traders and investors in Qingdao, Zhangjiagang, Shanghai and other places, ICE futures are approaching 60 cents / pound since early September. Despite the fact that bears are still dominant, the operation is much more cautious.

First, the hurricane "Dorian" threatens the southeast cotton area of the United States. Two, the Federal Reserve's interest rate cut in September has been "fixed", and the commodity futures, stock and bond markets can be favorable. Three, despite the fact that China continues to cancel the 2019/20 cotton contract, the United States cotton is still easy to enter the Chinese market through Vietnam's cotton mill.

According to statistics, 1-7 months in 2019, China imported 488 thousand and 900 tons, 229 thousand and 200 tons and 99 thousand and 300 tons of Vietnam, India and Uzbekistan yarn, accounting for 41.43%, 19.42% and 8.42% of the total imports respectively. Vietnam's yarn exports to China continued to "advance vigorously," while the United States cotton was the most important and key raw material for Vietnam's cotton mill. Four, the Sino US trade negotiator called again and agreed to hold a high-level round of consultations in Washington at the beginning of October.

And ICE cotton futures, cotton FOB quotes (FOB, CNF) low position to stabilize, rebound performance is different, in the past half a month, the port customs clearance, bonded cotton RMB quotations continued downward adjustment (mainly refer to Zheng disk, base); especially some small and medium traders, intermediate enterprises because of relatively small inventory, eager to ship back the funds and the 2018/19 annual cotton, Brazil cotton delivery or shipping speed raising concerns, and rushed to reduce the price of goods, the market, the impact of large and medium-sized traders (including foreign businessmen) is relatively large, confidence has shaken, at present the port cotton quotation is very confusing, the same origin, the same quality and the same warehouse quotes gap can even reach 300-400 yuan / ton.

September 8-9, Qingdao, Zhangjiagang and other places S-6 1-5/32 lower yuan quoted 12400-12600 yuan / ton (net weight); and some large enterprises, cotton merchants in the quotation is still 12800-13000 yuan / ton; SM 1-5/32 Brazil cotton RMB quotations from 12500 yuan / ton to 13100 yuan / ton; in the case of continued expansion of losses and relatively low procurement, large inventory and difficult to turn cotton enterprises can only choose to stick to and wait for the market to change.

A cotton trader in Qingdao said that the number of Australian cotton shipped in 7/8 months and arrivals in the 2018/19 months was significantly less than that in the previous two years, and the bonded stocks grew slowly. However, with the reporting and warehousing of Brazil's new cotton declared in 9/10/11 month, the pressure on the storage capacity of the bonded area will increase significantly, and the warehousing fee will also increase significantly.