Market Analysis: Observation Of Global Cotton Trend Influenced By Market Factors

The weekly settlement price of the main contract of cotton futures this week was 14735, with a weekly rise and fall of 0.37%; The closing price of spot index 3128B was 15777 yuan/ton, up or down by - 0.31% compared with last week; The cotton of the North Xinjiang Production and Construction Corps is becoming more and more rare, and the price is also stronger than that of cotton in other places. The closing price of the main contract of cotton yarn futures was 20515, with a weekly increase or decrease of 0.05%. Xinjiang Cotton 21/31 level double 29 corresponds to the price difference of Xinjiang Kuji of 600-1050 yuan/ton for the main contract and 800-1350 yuan/ton for the mainland.

The slack season of textile enterprises continues, downstream orders are still insufficient, the sales progress of finished products is slow, the startup rate remains stable, the yarn price is stable and weak, and small and medium-sized enterprises are under great pressure. At present, the finished products are slightly reduced compared with half a month ago, and the overall production and sales of the enterprise are relatively stable, but the sales pressure is also increasing. According to BCO data, by the end of May, the total inventory of Xinjiang's industry and commerce was estimated to be 2.87 million tons, and the monthly shipment volume from June to September in the past three years was about 300000 tons.

In addition, according to the data of the Central Cotton Storage Information Center, by the end of 2023, Xinjiang's total cotton yarn production capacity will be 22 million spindles, and the annual cotton consumption will be 1.58-2 million tons. The average monthly cotton consumption is estimated to be about 170000 tons, and the total cotton consumption from June to September will be 680000 tons. This year, the cotton planting period is relatively smooth, and there is no large-scale reseeding. Therefore, the weighing season may be earlier. By the end of September, when new flowers come into the market, it is estimated that 990000 tons of cotton can be used in Xinjiang.

The manufacturing PMI in June was 49.5% lower than the Rongkui line, shrinking for three consecutive months. The non manufacturing PMI was higher than the Rongkui line, but it has declined for four consecutive months. New orders declined, raw material inventories declined, and employment did not improve. Export orders were 48.3%, indicating that the decline in exports of domestic enterprises was further exacerbated. The ex factory price is falling sharply, but the price of raw materials is still rising, so the profit data of industrial enterprises is declining.

According to the data, the high-tech manufacturing PMI is 52.3%, and the equipment manufacturing PMI is 51%, both of which are expansionary. They have expanded for eight consecutive months and four consecutive months, which proves that vigorously developing new quality productivity is not just a mouthful, but also a source of resources. It is the high energy consuming industry (PMI is 47.4%) and the consumer goods industry (49.5%) that have been dragged down. As usual, everyone is reluctant to spend money, and the structural adjustment of traditional industries has been continuing.

From the recent speeches of leaders of Lujiazui Forum and Davos Forum, it can be seen that the top management still emphasizes the method of consolidating the foundation and strengthening the economy, slow simmering in a small fire, and there will be no big release of water and big stimulation in the short term. The expectation of production and operation activities is above the boom and bust line, indicating that the confidence of the surveyed enterprises in the future is still good.

Internationally, the Federal Reserve released the minutes of its monetary policy meeting in June 2024 on July 4, which showed that officials of the Federal Reserve had differences about how long high interest rates should last. Although some officials stressed the need to be patient, some officials warned that further weakness in the job market might lead to a sharp rise in the unemployment rate. The latest data released by the United States shows that the labor market is cooling more than expected, and the slowing signs of the economic growth in the United States drive the expectation of interest rate cuts to rise.

According to the observation tool of the Federal Reserve of Chicago Mercantile Exchange, the possibility of cutting interest rates by 25 basis points in September increased from 63% to 66.5%. Affected by this, the US stock market surged, the S&P 500 index, the Nasdaq index and the Nasdaq 100 index collectively reached new closing highs, while the US bond yield and the US dollar both fell.