Zheng Cotton Market Trend To Maintain Interval Oscillation

Cotton, the raw material of textile and clothing as an optional consumer goods, has fallen sharply under the background of the new crown pneumonia epidemic sweeping the world. Absolute price and relative price are at the lowest level in history. However, the extreme pessimistic expectation of terminal consumption has been fully digested by the market, and the growth of new cotton will become the focus of the market. At present, the new cotton is growing well in the United States, the weather in Xinjiang is no exception, the supply of global cotton is stable, and the terminal consumption is still waiting for a few days.

US cotton grows better and exports are blocked.

The US cotton production report released by the US Department of agriculture in June 1st showed that as of May 31, 2020, the US cotton sowing schedule was 66%, an increase of 13 percentage points from the previous week, a decrease of 1 percentage points compared with the same period last year, which is equal to the average in the past five years. The cotton bud rate in the United States was 8%, which was 7% in the same period last year and five in the past five years. The growth rate of cotton in the United States accounted for 44%, which was 46% in the same period last year.

The US Department of agriculture report shows that in May 2020, from 15 to 21, the net contracted volume of US cotton in the 2019/2020 year was 10 thousand and 100 tons, a decrease of 65% over the previous week, a decrease of 85% over the previous four weeks average. A total of 25 thousand tons of new contracts were signed, mainly from China, Vietnam and Turkey. A total of 15 thousand tons of contract has been cancelled. The US 2020/2021 net annual export volume of cotton is 39 thousand tons.

The US 2019/2020 annual land freight capacity was 60 thousand and 600 tons, an increase of 6% over the previous week, 4% less than that of the previous four weeks, and mainly shipped to Vietnam, China, Pakistan, Turkey and South Korea. The net contract volume of Pima cotton in 2019/2020 was 2291 tons, a big increase compared with the previous week and the first four weeks. In the US 2019/2020, Pima cotton transport volume was 317 tons, a decrease of 70% over the previous week, a decrease of 76% compared with the previous four week average, mainly for Pakistan, Vietnam and India.

A slight decline in planting area in Xinjiang

In recent years, the temperature of Xinjiang Korla has been rising rapidly. The overall temperature is maintained at 16 C - 31 C, and the wind is not strong enough to accelerate the growth of cotton. Korla area cotton grows vigorously, plant height 27 - 40 centimeters, fruit branch 3 - 5 Taiwan, most cotton branches already bud. The pests and diseases in cotton fields are mainly aphids, and 3 insecticides against aphids have been sprayed in cotton fields. In June, cotton farmers' field management was mainly spraying pesticide and irrigation.

In 2020, Xinjiang's cotton target price level remained unchanged at 18600 yuan / ton, stabilizing the farmers' expectation of planting cotton, and the cotton planting area in Xinjiang decreased by 0.5% compared with the previous year. Xinjiang's cotton output accounts for more than 80% of the total domestic output, and there is a trend of continuous improvement. In the future, as long as the cotton planting area and output of Xinjiang are guaranteed, with the import from the national level, there will be no major problems in the supply of cotton throughout the country.

Improved consumption of textiles and clothing

From 2020 to April, domestic apparel retail sales totaled 216 billion 720 million yuan, down 32.8% compared with the same period last year. In April, the total retail sales of clothing in the same month were 55 billion 690 million yuan, down 22.4% from the same period last year, and the ring retail sales increased by 16.5%.

From 1 to April 2020, the total export volume of textiles and clothing was 66 billion 620 million US dollars, down 10% (9% of the total export volume of national goods trade). Among them, textile exports amounted to 37 billion 310 million US dollars, an increase of 2.9%, and clothing exports of 29 billion 310 million US dollars, down 22.3%. In April, exports of textiles and clothing were US $21 billion 360 million, up 9.8% over the same period (3.5% of the total growth in China's goods trade). Among them, textile exports amounted to 14 billion 620 million US dollars, an increase of 49.3% over the same period, an increase of 63.8% over the month, and 6 billion 740 million US dollars in clothing exports, a decrease of 30.3% over the same period last year, an increase of 3.6% over the month. From the improvement of the export data of terminal textiles and clothing consumption, we can see that the marginal consumption of the terminal has been improving gradually, but it still takes time before returning to the normal level before the epidemic. However, the most difficult time for terminal consumption has passed.

To sum up, the textile industry has entered the traditional off-season, and the willingness of textile enterprises to replenishment is weak. From a technical point of view, Zheng cotton is still in the vicinity of the upper rail of the oscillation finishing area, and there is still no effective breakthrough. Combined with weaker fundamental analysis, Zheng cotton will still maintain weak oscillation.