US Cotton Exports Shrink, Prices Continue To Decline

According to the latest release of USDA10 month Global cotton The supply and demand forecast report shows that the end of the world inventory is expected to increase for fifth consecutive years, reaching more than 23 million 300 thousand tons this year, an increase of 1 million 263 thousand tons or 5.7% over the previous year, breaking through the historical record.

According to the latest cotton weekly sales data released by the US Department of agriculture, as of October 9th, cotton exports in the US 2014/2015 sold 7000 packages in October 9th, and the main export destinations were Taiwan, Turkey and China. Exit The volume is much lower than expected, and 20300 orders of cotton orders were cancelled, of which China cancelled 14800 packages, which aggravated the market's concern about the decline in China's demand. With the new cotton coming from the US and India, the supply pressure will appear. After losing the support of the biggest buyer of China, the international cotton price will increase in India cotton production. Exit Weak downside will maintain long-term downtrend.

Domestic seed cotton prices are rising, and stage supply is tight to support the 1501 contract.

It is understood that last weekend, a large textile enterprise in Shandong raised the purchase price of lint 300 yuan / ton, 2128 to the factory price 14600 yuan / ton, 3128 to the factory price 14300 yuan / ton, fixed, cash settlement. Cotton price rise has led to the enthusiasm of cotton enterprises to buy, seed cotton purchase price has risen in all directions, and the price of seed cotton in the mainland has also changed. Recently, the price of 3128 grade seed cotton has risen to 3.2 - 3.5 yuan / Jin in the the Yellow River valley of the mainland, and the 1228 class purchase price in the Yangtze River has risen to 3.2 - 3.3 yuan / Jin. Xinjiang seed cotton purchase market continues to maintain rising prices. The price of Bole in North Xinjiang is 6.4 yuan / kg and 6.6 yuan per kilogram in Shihezi. Southern Akesu and Korla rose to 6.4 - 6.8 yuan / kg, and some of them had been closed.

At present, the raw material inventory of textile enterprises has already bottomed out, the purchasing intention of replenishment warehouse has increased, the national storage has stopped running, the cotton import quota has not been increased, the market circulation of cotton resources, especially the high quality cotton resources are lacking, and the textile enterprises are generally not interested in the mainland cotton, and the increase of inquiry procurement in Xinjiang, but the supply has not kept up. Stage supply is tight to support the strong contract pattern in recent months.

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Recently, Wang Jianhong, Deputy Secretary General of the China Cotton Association, said at the 2014 Zhengzhou agricultural products (cotton) futures forum that in September 2014 - March 2015, the national cotton store would be stopped. Unless the market was in short supply, the market would not be released. This year's cotton production of 6 million 600 thousand tons, plus 894 thousand tons of quotas, is a total of 7 million 500 thousand tons of supply, enough to meet domestic consumption from now until next March, so during this period, the possibility of national cotton storage is less likely.

Whether or not to throw the store after March? There are about 11000000 tons of stock in the national reservoir, partly due to a long storage time and a serious decline in the grade. If we do not throw it again, the pressure of the relevant departments will be very great. Once the huge inventory is listed, the domestic cotton price rise will be very heavy. From a fundamental point of view, the contract in recent months is significantly stronger than the far month contract.

In addition, from 9 to November, the target price will be priced. During this period, if domestic cotton prices fall sharply, the subsidy will be further increased, which will certainly increase the financial pressure of the state.

In short, the global cotton stocks continue to rise; due to the decline in China's imports, the US cotton future sales are not optimistic; India's output is increasing, it is urgent to find a sales market, and will compete with the US cotton. The international cotton price is difficult to shake off the weak pattern. Although the supply of cotton contracts in recent months has been tight, the supply of new cotton has gradually increased, and the space for the rise in recent months has been limited.