According To USDA Export Week: China'S Signing Of US Cotton Is Increasing

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According to the USDA Export Weekly Report, in the week of September 22-28, 2023, the contracted export volume of American upland cotton in 2023/24 will be 54480 tons, significantly higher than the average level of the previous week and the first four weeks (up 300% month on month). Among them, 28647 tons will be contracted by China, with an increase of 801% month on month, which is not a large extent, accounting for 52.58% of the total contracted export volume of American cotton that week. The role of "mainstay" is prominent, Vietnam signed 15572 tons of contracts, accounting for 28.58% of the total amount of American cotton export contracts.

Some organizations and cotton related enterprises believe that the explosive growth of American cotton in 2023/24 signed by China in late September is due to the "three consecutive negative" period of ICE cotton on September 20-22, and the intraday low of 85.55 cents/pound of the main contract in December, which triggered cotton textile mills and traders holding quotas to enter the market on bargain hunting in time. In addition, with the opening of seed cotton harvesters in cotton regions of northern Xinjiang in late September, farmers, cooperatives and ginning mills reported that the unit yield was lower than the previous yield measurement and expectation, which caused cotton using enterprises to worry about the high domestic cotton price in 2023/24, and then took measures to lock in foreign cotton resources in 2023/24 in advance to ensure the stability of raw material supply and gauze quality. Of course, the slight recovery of cotton textile and clothing export traceability orders in September also played a certain role in promoting textile enterprises to sign contracts with American cotton.

In addition, the additional 750000 tons of cotton import sliding tax quota issued in 2023 can be extended to use before the end of February 2024, giving cotton textile mills the opportunity to sign a large number of December/January shipping dates for 2023/24 American cotton. At present, the quotation basis of Brazilian cotton in 2022/23 is still high. Compared with American cotton, the performance price ratio is not high or even low. Some cotton using enterprises sign contracts and focus on American cotton (although the shipment and delivery date are delayed for 1-2 months, there is a reserve cotton sales base at present). For example, at present, the basis difference of M1-1/8 of Brazilian cotton shipped in October/November/December is 9-9.5 cents/pound (new cotton in 2022/23), and the basis difference of M1-1/8 of American cotton shipped in September/October/November is only 9.25-9.5 cents/pound (cotton in 2022/23); The basis difference of American cotton 31-336/37 strong 28/29GPT on the December/January shipping date is only 12.5-13 cents/lb.