Market Observation: Pay Attention To The Dynamic Data Analysis Of Global Recent Domestic Cotton Supply And Demand

In the USDA October report, the US Department of Agriculture released the October report on global cotton supply and demand, In 2024/25, global cotton production increased slightly, and consumption, trade, and beginning and ending inventories decreased. Specifically, the global cotton output increased by 48000 tons, of which the increase in output in China, Brazil and Argentina offset the decrease in output in the United States and Spain. World trade decreased by 110000 tons, mainly due to the decrease of China's imports. The global final inventory was reduced to 16.619 million tons, including the adjustment from 2023/24, resulting in a reduction of 90000 tons in the beginning inventory. The neutral bias is affected as a whole.

According to the October cotton report released by the US Department of Agriculture, the US cotton output, factory use and export in 2024/25 have declined. The output continued to decline by 68000 tons, mainly considering the possible losses caused by Hurricane Helen. The export was reduced by 65000 tons. In addition, the domestic consumption was reduced due to the 22000 tons reduction in the use of cotton in the United States during the recently announced startup of textile enterprises. At the end of the final period, the inventory increased by 22000 tons, which had an overall impact on the vacancy.

As of October 1, the drought degree and coverage index of the main American cotton producing areas (92.8%) was 106, 102 lower than that of the previous year, and 17 lower than that of the previous week; The drought degree and coverage index of Texas was 137, 148 lower than that of the previous year, and 16 higher than that of the previous week. Considering the harvest period, the impact of dry weather on the final yield is weakened.

The abandonment rate in October has not changed significantly compared with that in September, but the yield per unit area has decreased. Drought and hurricane weather have increased the uncertainty of the yield. At present, it is estimated that the impact of weather has been priced.

The weekly crop growth report released by the United States Department of Agriculture (USDA) early Tuesday morning showed that as of September 29, the boll filling rate of American cotton was 72%, 63% the previous week, 72% the previous year, and 71% the five-year average.

The harvest rate of American cotton was 20%, 14% in the previous week, 17% in the same period last year, and the five-year average was 16%.

The excellent rate of American cotton was 31%, 37% the previous week and 30% the same period last year.

According to the current abandonment rate, excellent rate and unit yield reduction, the US cotton output in 24/25 was 2.97-3.13 million tons.

According to the report of the United States Department of Agriculture (USDA), from September 27 to October 3, 2024, the contracted export volume of American upland cotton in 2024/25 will be 20339 tons, down 7% the previous week, 12% lower than the average level of the previous four weeks. The main buyer is Vietnam (12848 tons), and the contract cancellers are China (1816 tons), India (409 tons), and Japan (68 tons).

In 2024/25, the export shipment volume of American upland cotton will be 21588 tons, down 11% from the previous week and 13% from the average level of the previous four weeks, mainly to Pakistan (5607 tons).

The contracted export volume of American upland cotton in 2025/26 is 2996 tons, and the main buyer is Turkey.

USDA reported in October that there was no adjustment in Indian cotton output, import and export and consumption in 2024/25. Only the initial inventory increased by 6000 tons, which had a neutral impact.

Indian domestic market prices fell this week. The speed of new cotton coming into the market continued to accelerate. As of October 9, the daily delivery volume estimated by the private is about 55000 packages.

USDA's monthly report in October increased Brazil's cotton output by 22000 tons, while its export decreased by 44000 tons, corresponding to China's reduced import volume. The final inventory at the end of the period increased by 52000 tons, which had a negative impact.

As of the week of September 29, the total harvest progress of cotton in Brazil (98.5%) was 100%.

The export of raw cotton in August was 169500 tons, and the largest single destination in September was China, accounting for 47104 tons (28%) of the total in that month.

At present, it is expected that the cotton planting prospect in Brazil is optimistic, and the area will increase. The realization of farmers' planting intention depends to some extent on soybean (4521, - 21.00, -0.46%) whether the crops can be planted in time, and the second crop of cotton (or corn (2388, 9.00, 0.38%))。 It is expected that there will be a lot of rainfall in the central and western regions, which will help soybean planting.

The USDA monthly report in October predicted that China's cotton output would increase by 87000 tons to 6.14 million tons in 2024/25, and imports would continue to decrease by 108000 tons, matching the low quota. The beginning inventory would decrease by 109000 tons, mainly from the increased consumption in 2023/24. The overall ending inventory decreased by 131000 tons, but the impact of the adjustment in 2024/25 was more neutral.

USDA adjusted the output and import, which corresponded to the actual situation in China and was reasonable. In addition, USDA remains optimistic about Chinese consumption, which is mainly supported by the stability of overseas orders.

At present, the output of Xinjiang is expected to be more than 6 million tons, mainly due to the increase of unit yield. (There may be rotary cotton)

Compared with the National Day holiday period, cotton prices in Xinjiang have risen slowly in the past two days, and machine picked cotton in northern Xinjiang hovered around 6.3 yuan/kg; Kuitun - Euphrates River, the purchase price of machine picked cotton is 6.2-6.52/kg; Hand picked cotton in southern Xinjiang is about 7.1 yuan/kg. The price of cottonseed dropped to 2-2.05 yuan/kg.

Before the National Day holiday, the market continued to rise, and the rush to harvest sentiment intensified before the acquisition of large quantities. However, as the price fell after the holiday, the rush to harvest sentiment returned to calm, and the willingness of cotton farmers to sell increased significantly. The battle line in the acquisition period is extended. The current upside down pattern has led to the risk exposure of the ginning plant acquisition. After excluding the premium, the space above the panel is relatively clear.

As of October 11, the start-up load of the cotton yarn factory was 52.2%, which continued to rise. At present, the overall startup rate of textile mills in various regions is maintained at around 52%, and the startup rate of textile mills in Foshan region is rising, and the overall startup is stable.

As of October 11, the raw material inventory of the spinning mill was 25.2 days, which was mainly used when buying. Finished products were stored for 18.6 days and largely removed from the warehouse. The cotton yarn inventory of the weaving factory is 13.9 days, and the centralized replenishment of raw materials was carried out before the National Day holiday. The finished cotton grey fabric inventory of the weaving factory is 26.3 days, and the finished products go to the warehouse.

The turnover of the textile city improved, but the deviation from the same period is not optimistic.

After the festival, the cotton market was in a general situation, and the trading atmosphere was stable. The weaving factory maintained a small order shipment. Due to the decline of futures prices, the production and sales rate was lower than that before the festival, and the grey fabric quotation ran smoothly after the increase, with less follow-up transactions, and the weaving factory remained near the profit and loss line.

From the perspective of orders, at present, the textile mill has a large number of small orders and individual orders. The Nantong home textile market has been stable recently, and the textile mill's orders have increased, but the overall order increase is limited.

The overall trading atmosphere of pure cotton yarn market gradually faded under the fall of macro sentiment and raw materials. In terms of price, on the National Day and the first day after the festival, the prices of textile enterprises were stable or rising, and the deal was followed up. However, with the decline of cotton prices in the later period, textile enterprises cut prices again, most of the quotations were temporarily stable, and the market wait-and-see sentiment rose.

With the expansion of spinning losses in the earlier period, the cash flow of the mainland textile enterprises lost 1350 yuan/ton on the spot, and the Xinjiang spinning profit was 1300 yuan/ton.

In terms of power on, India, Vietnam and Pakistan have improved.

Influenced by the rising cost of American cotton, most cotton yarn quotations of Vietnamese cotton mills during the National Day holiday were 10 cents or more higher than those before the festival. After the festival, the overseas sales price of Pakistan gauze continued to rise. In the short term, the sales price of cotton yarn in Vietnam and Pakistan is still high, which restricts replenishment in the Chinese market. Indian yarn has been corrected with the local cotton price. At present, domestic buying has gradually shifted to India.

Last week, the domestic cotton price slightly retreated, the domestic cotton yarn price slightly fell, and the imported yarn has a strong willingness to support the price. First, the shortage of siro spinning is common, and second, the autumn and winter orders have certain requirements on the weight of fabric, which to some extent supports the premium of imported cotton yarn over domestic yarn. In the later period, after the price increase in Vietnam and Pakistan, the domestic acceptance was not high, and the profit of spot orders was significantly reduced. Cotton yarn traders were more cautious, mainly selling at the price. On the whole, imported cotton yarn maintained positive operating profit, and market confidence was slightly enhanced.

The internal and external price difference is 3000 yuan/ton, and the import profit of sliding allowance tax is 587 yuan/ton. The number of quotas issued is too small, and the import volume may rise again after January 2025.