Market Observation: Analysis Of Transaction Expectations In The Global Cotton Market

Futures:

The cotton 2501 contract closed yesterday at 14060 yuan/ton, down 75 yuan/ton or 0.53% from the previous day. 471866 positions and 4168 positions.

On hand:

Xinjiang 3128B cotton arrived at the factory at 15305 yuan/ton, unchanged from the previous day, with spot basis difference CF01+1250, up 80% from the previous day. The national average price is 15535 yuan/ton, 19 yuan/ton lower than the previous day, and the spot basis is CF01+1480, 60 yuan higher than the previous day.

Internationally,

Most of Pakistan's cotton regions are hot and dry, and the temperature continues to be above 30 ℃. The local meteorological department predicts that this weather pattern will continue in the next few days. Thanks to favorable weather conditions, the local cotton picking operation has been steadily promoted. If the temperature drops slightly, it will be more helpful to improve cotton quality.

At present, a few cotton fields are still affected by insect pests, but there is no significant impact on the whole. At present, the daily market volume of seed cotton is 7750 tons, but a part of seed cotton flows through unofficial channels.

It is expected that the local seed cotton market will decline from November. Most ginning plants have started processing operations, but the number of processing plants is still low compared with the same period last year.

The price of Pakistan seed cotton varies from 7000-8500 rupees/40kg depending on the quality, and the premium is available for high-grade cotton.

In October, the USDA supply and demand report cut the 24/25 US cotton output and export as scheduled, the global cotton output increased month on month, and the consumption slightly decreased month on month. However, due to the decline of the beginning inventory, the ending inventory slightly decreased month on month. On the whole, the current downturn in downstream demand has not changed substantially. The global cotton supply and demand pattern is expected to remain loose in the new year, while macro uncertainty still exists. International cotton prices may continue to be under pressure in the short term.

On the domestic side,

From the supply side, the domestic cotton yield is expected to be strong in the new year, and the yield increase is expected to increase. As the purchase price of Xinjiang seed cotton continues to decline, the sales progress of some farmers has also accelerated, but there is still a reluctance to sell. On the demand side, the operating rate of downstream textile enterprises continued to rise on a month on month basis, but the new orders were less than expected, textile enterprises were not enthusiastic about replenishment, the demand side did not improve significantly, and the actual benefits were not enough.

In general, the domestic new cotton production is expected to maintain, the downstream demand recovery is still limited, and the cotton price is limited. At present, new orders are insufficient, and cotton prices are still lack of obvious upward drive, so the space for continuous rebound may be limited.