Global Economic Data Are Bad, Cotton Demand Shrinks, Prices Are At A Loss.

In April 15th, under the background of the overall decline of financial market, ICE cotton futures were under pressure. The US Dow Jones index and other markets rose sharply on Tuesday, but on Wednesday, the financial markets dropped sharply under the drag of bad retail data and bank revenues. On that day, ICE futures were mixed. In addition to the slight rise in May, the remaining contracts were all down, and the market did not have a clear direction.

The US Department of commerce data showed that in March, US retail sales hit an unprecedented 8.7% decline, the largest monthly decline since record. In addition, US bank revenues fell by more than 40%, because hundreds of billions of dollars were spent on upcoming loans, credit cards and mortgages. Manufacturing output has seen its biggest decline in more than 74 years. Another report by the Federal Reserve Bank of New York showed that factory activity in New York fell to a record low in April. These data support analysts' views on the US's economic contraction in the first quarter.

At present, the gloomy economic data and the first quarter performance of the US aggravate people's concerns about the economic damage caused by the coronavirus epidemic, and report that the supply of crude oil is continuously oversupplied and the demand is down. The rise and fall of the US stock market and the sluggish recovery in oil prices have not had a positive effect on cotton prices.

On Thursday, the US Department of agriculture will issue a weekly report on US cotton exports. After weeks of maintaining contracts and rapid growth in shipments, last week's signing of US cotton contracts has become a net negative reason, mainly due to China's massive breach of contract. As the demand for textiles and clothing has shrunk dramatically, Chinese enterprises have not done enough to do so, so the market expects that this situation may continue.

In the next 6-10 days, the temperature in the American cotton growing areas is high, but the rainfall in most areas is higher than that in the whole year. According to the cotton farmers in Texas, the soil in this state is very dry this year. Analysts said that the 52-54 cent / pound new district could last for some time, and the previous collapse has already partially absorbed the negative impact. Breaking through the current operational range requires additional external forces, such as the improvement or deterioration of the new crown virus.