The New Crown Is Coming To An Inflection Point And Cotton Prices Will Rebound Soon.

According to NCC, the US cotton planting area in 2020 is expected to decrease by 5.5% compared with the previous year (significantly lower than the previous data released by the magazine cotton grower). The US influenza continues to rage and China's purchase of 2019/20 cotton is delayed due to pneumonia. The main contract of ICE continues to oscillate and consolidate in the 68-70 compartment / pound narrow compartment.

Since last weekend, the price of cotton quotas for bonded, spot and shipping dates decreased with ICE (FOB, CNF), 1/3 EMOT/MOT 41-4, 42-4 (length 32, strong 28GPT) the offer fell below 70 cents / pound; ME 41-3, ME 42-4, ME 42-3 (length 33, 34, strong 28GPT) quotation also only quoted us cents / lbs, while the month of the month of shipment was Brazil. 1-1/8 (strong 28GPT) quoted 77-77.20 cents / pound, 12/1 month shipping date SM 1-1/8 West Africa cotton (Benin) quoted 76.3-77.3 cents / pound, all lower than last week by 0.5-1.0 cents / pound.

However, unlike the ICE and the spot market quotations, the price of the cotton base price of the port clearance has increased rapidly with the sharp rebound of Zheng cotton, and the willingness of traders to clear customs has markedly increased. In February 17th, Qingdao, Zhangjiagang and other places 18/19 S-6 1-5/32 (strong 29GPT) net weight rose to 13650-13700 yuan / ton; SM 1-5/32 Mali cotton net weight at 13900-13950 yuan / ton; 2019/20 year Brazil cotton M36 (strong 28GPT) basis difference quoted price reached 14000-14100 yuan / ton, compared with last week's general inflation 100-150 yuan / ton.

Some traders and cotton enterprises have judged that with the turning point of the new crown pneumonia epidemic situation, the resumption of cotton textile enterprises and China's resumption of large-scale signing and purchasing of 2019/20 cotton and other good news in a row, plus the locusts disaster that has swept Africa, India and Pakistan, or the sharp rise in grain prices and the pace of China's central bank's interest rate cut are getting closer, so the short term "strong and weak" pattern appears. Zheng cotton will guide domestic cotton and imported cotton prices continue to rebound (CF2005 will break 13500 yuan / ton, to 14000 yuan / ton), reluctant to sell, bullish sentiment continues to heat up.