The Market Is Extremely Anxious. The Cotton Market Is Dangerous.

In May 28th, ICE cotton futures continued to narrow, and the market waited to postpone the US cotton export weekly report released on Friday and the possible implications for Sino US relations.

According to foreign reports, China's adoption of the Hongkong regional security law may cause a strong reaction from the US side, and the first phase of the Sino US agreement is being implemented. The deterioration of Sino US relations may be reflected in the weekly report of the US cotton export. As time goes on, the market is increasingly worried about the destruction of US cotton.

Weather forecasts show that temperatures in Texas, Delta and southeastern regions over the next 6-10 days are higher than normal and rainfall is lower than normal. By the end of last week, the US cotton sowing has just completed half of the same period in the past five years, but the US hurricane season is about to begin in June 1st. The market is paying close attention to Sino US relations while maintaining high attention to the tropical storm in the Atlantic.

The US economy continues to suffer from the adverse effects of the new crown epidemic. A report released on Thursday said that the number of people who first applied for unemployment assistance increased by 2 million 100 thousand last week, and sales of durable goods fell by 17% in the first quarter, slightly higher than market expectations. It is puzzling that the Dow Jones index is still above 25000 when 30% of the US labor force is out of work. What the market does not know is whether the worst period of the US economy has arrived.

Foreign people believe that the implementation of the first phase of the Sino US agreement, the new crown epidemic situation and the Hongkong issue are all uncertain factors in the cotton market. It is reported that China imported 3-4 ships of South American soybeans this week, but Trump's tough attitude toward China is still tense.

In May 28th, under the influence of anxiety, ICE futures contracts fell down in July. The market also worries that China will buy more cotton that is more competitive in other countries. Analysts believe that China has been purchasing large quantities of cotton from Brazil, which is bad for the market. Holland Cooperation Bank said in its report that although the new crown is gradually stabilizing, it may push cotton retail sales up at the initial stage, but as consumer confidence falls to the level of the global financial crisis, the impact of blockade on cotton will continue.