Zheng Cotton Has The Support Under The General Plan, But The Price Of Cotton Is Still Under Pressure.

During the national day, the US cotton prices went up slightly, showing a slightly stronger performance. The impact of the weather and the expected easing of Sino US trade relations support cotton prices at the same time. A week after the national day, the Sino US trade consultation is still the focus of the market. Domestic cotton prices are still under pressure on the listing and demand of new cotton. The prospect of Sino US trade negotiations has far-reaching implications for the downstream demand of domestic cotton.

China's new cotton market hits market

At the end of August, the total stock of cotton turnover in China was about 2 million 520 thousand and 900 tons, a decrease of 367 thousand and 200 tons from the previous month, an increase of 893 thousand and 700 tons compared with the same period last year. In August, industrial inventories and commercial inventories totaled 3 million 208 thousand and 200 tons, an increase of 694 thousand and 800 tons compared with the same period last year, and a reduction of 385 thousand and 400 tons in comparison. Although domestic cotton stocks have dropped seasonally, they are still at a high level for many years. Later, with the new cotton coming on the market, the inventory pressure is still large.

In mid September, the cotton picking seed cotton began to go public, and the purchase price varied. Among them, the price of picking cotton seed is higher, and the price of clothing 42% is 6.1 to 6.2 yuan / kilogram. The price of the scale is lower, such as the weir and the Weili, and the purchase price of lint 43% is between 5.6 yuan and 5.7 yuan per kilogram. At present, the processing capacity of hand picked seed cotton is still less, and most of the cotton mill is still mainly made of cotton. The price of the cotton padded cotton in the area with a higher price is reduced from 14200 yuan to 14500 yuan per ton to 13200 yuan to 13500 yuan / ton, and the price of the local cotton padded cotton is lower from the initial 13500 yuan / ton to 13000 yuan / ton.

At the end of September, the scale of the machine was picked up in the northern Xinjiang, and the six divisions of the regiment were priced at 4.8 yuan / kg. The two agricultural division and the eight agricultural division jointly priced 5.1 yuan / kg, but 10% of the water miscellaneous should be deducted. In September 27th, after the fall of Zheng cotton prices, the purchase price of seed cotton was lowered by 0.2 - 0.3 yuan per kilogram.

US cotton's latest weekly export situation

In the weekly cotton growth report, the United States Department of Agriculture said that as of September 29th, cotton growth rate rose to 40%, compared to 39% in the previous week, 42% in the same period last year, and 16% in cotton harvest, 11% in the previous week and 19% in the same period last year. The excellent and good rate of US cotton growth is generally stable, but the weather in Texas still raises market concerns. At present, the harvest rate of the United States cotton is slightly lower.

The US Department of agriculture's export sales report showed that as of September 26th, the US 2019/2020 annual export sales of the upland cotton increased by 177 thousand and 800 packs, which increased by 15% compared with the previous week, but increased by 49% over the 4 week average. The performance of the US land cotton export package was reduced by 12% over the previous week, compared with the 4 week average reduction of 16%.

Market outlook

According to the monthly report released by the US Department of agriculture, the global supply of cotton has increased substantially in the new year, and the supply is still adequate, while the demand performance is relatively weak. The downstream textile enterprises orders in China are better than that in August under the background of the peak season, but the improvement rate is not as good as in previous years. However, the replenishment of raw materials for cotton raw materials is still sustainable, and downstream inventory pressure is mainly concentrated in processing plants.

With the advent of the new cotton market in China, the machine picked cotton will be the main trade volume in October and November. However, the theoretical processing cost of the new cotton in Northern Xinjiang still has a larger profit margin than that of the zhengmian disk. Overall, after a fall in domestic cotton prices, the next strategy is supported. If Sino US trade relations fail to ease, cotton prices remain unoptimistic.