The Second Stage Of Sino US Economic And Trade Consultation Is On The Agenda. Cotton Price Is Facing New Situation.

According to public reports, the Sino US economic and trade consultative meeting between China and the United States in May 8th reached the first time after the signing of the first stage economic and trade agreement. The two sides said they should strengthen cooperation in macroeconomic and public health, and strive to create favorable atmosphere and conditions for the implementation of the first stage economic and trade agreement between China and the United States, and promote positive results. The two sides agreed to maintain communication and coordination.

According to the foreign news, China and the United States may start the second stage of high-level economic and trade consultations in the near future. This will be the first consultation since the first phase of Sino US agreement in January this year, and it will play a significant role in boosting market confidence. President Trump said last Wednesday (May 6th) that if he is satisfied with the progress of the agreement, he will show his attitude in the next few weeks.

Encouraged by the easing of Sino US relations, ICE futures have risen three days in May 11th.

At present, the first stage economic and trade agreement between China and the United States is coming down gradually. According to the data released by the General Administration of customs, China imported 17 million 792 thousand tons of soybeans, an increase of 6.2% in the first quarter of this year. Over the same period, China imported 35 billion 560 million yuan of agricultural products from the United States, an increase of 1.1 times, of which 7 million 814 thousand tons of imported soybeans increased by 2.1 times, with a total value of 21 billion 880 million yuan, a 2.1 fold increase.

The General Administration of Customs has said that there have been some positive factors in recent Sino US bilateral trade, especially in recent years. Cui Tiankai, China's ambassador to the US, said that China is still implementing the agreement, such as buying some agricultural products from the United States, and is removing some of the restrictions faced by foreign companies in entering China's financial market. US agricultural giant ADM recently predicted that the number of soybeans purchased from the United States will return to the level of trade friction as China fulfills its commitments under the first stage trade agreement between China and the United States.

In the context of the easing of Sino US relations, the US cotton exports continued to perform well last week. The contract volume reached 370 thousand packs this year, and the contracted volume of the next year was 56 thousand packs, and China signed nearly 240 thousand packages. At the same time, the shipment of US cotton has also accelerated significantly. Up to now, the total number of contracts contracted to China has reached 2 million 760 thousand packages this year, with a total shipment of 1 million 275 thousand packages. At present, many Asian factories are slowly returning to work, but the starting rate is only 30-40%, mainly due to the failure of the whole staff to return to work, the massive cancellation of clothing orders and the weak demand. However, with the gradual relaxation of the blockade and gradual opening of stores, demand for cotton and terminal products will slowly recover.

On Tuesday (May 12th), the US Department of agriculture will release the May supply and demand report, which will include the first forecast in 2020/21. From the recent media and institutional forecasts from abroad, although the sowing area and output of the world are slightly reduced next year, the output of major exporting countries is still at a high level. The output of cotton in Australia will also increase significantly, while the global consumption is hard to grow, and the cotton base is a pattern of supply exceeding demand. In another month, the December contract reflecting the price trend of the new year will guide the market.