Tension Between China And The United States Highlights The Importance Of US Cotton Exports

On July 15, the US stock market rose and the weather in Texas continued to be hot and dry, which was beneficial to the market, but the news of rain in southern Texas threw a basin of cold water on the market. In the short term, the extreme high temperature and dry weather in western Texas on July 20-24 will support the market.

American cotton export weekly report has attracted more and more attention from the market. Although China has been actively purchasing American cotton recently, the market is increasingly worried about the prospect of US cotton export due to the continuous deterioration of Sino US relations. At present, China is the second largest buyer of American cotton this year, but it seems that the situation is not optimistic in the long run. The United States has been clinging to the epidemic situation and the Hong Kong issue, and has become increasingly arrogant on the South China Sea issue. Whether the Sino US agreement can be successfully implemented has become a great doubt. Therefore, the US cotton export Weekly has become a barometer of Sino US relations.

American futures brokerage companies believe that China has been an important buyer of American cotton since March, and if there is no purchase from China, the price of ice futures may still be close to 50 cents. On the other hand, the shortage of cotton supply between China and the United States is still unfavourable.

On July 15, ice cotton futures closed lower for the third consecutive day under the pressure of speculative long positions and short positions, and the December contract closed at a nearly two-week low of 62.13 cents. Observers believe that tensions between China and the United States have led to a decline in the dollar index. Opinion polls show that at this stage, the support rate of Democratic candidates in the United States is leading, which is also against the dollar. On the whole, the weakening of the US dollar is beneficial to us agricultural exports.