Cotton: multi-factor disturbance, the center of gravity of cotton price moves down
1. Supply side: American cotton production is expected to increase in the new year, and the cotton planting progress in Xinjiang has been completed by 25%.
2. Demand side: the retail performance of textile clothing in the United States and China in March was lower than expected, but according to the data, the consumption of domestic cotton in March was about 900000 tons, exceeding the historical average and also exceeding market expectations.
4. Import and export: China imported 400000 tons of cotton in March, a record high in recent years, but the domestic textile export data in March was weak.
5. Inventory side: the inventory of clothing in the United States has been suspended, and the inventory of finished goods in domestic textile enterprises has begun to decline.
6. International market: the macro disturbance continues, the fundamental support is weak, the non-commercial net long position decreases, and the American cotton is under pressure. Recent American cotton futures prices continue to decline, macro, fundamentals, funds and so on have an impact. From a macro point of view, there are signs of rising inflation in the United States recently, with Fed officials saying that they are partial to the eagle, and the market is talking about the number and nodes of the Fed's annual interest rate cuts.CrashtwinsanitygamecubeThere has been a lot of discussion, with CICC and many other institutions downgrading their forecasts for the number of interest rate cuts by the Federal Reserve this year, and the first rate cut this year is now expected to occur in September. It is expected that for a long time in the future, the market discussion on this issue will continue, and the impact on cotton prices is far from over. The dispute over supply and demand this year is over, and the focus of the market has shifted to the new year. In the new year, the degree of drought in the American cotton planting area has been weakened. At present, the proportion of drought in the American cotton planting area above D1 level accounts for less than 10%, which was originally lower than the same period last year. Based on this data, the market generally expects American cotton production to increase in the new year. Finally, the increase in American cotton production in 2024 quarter may exceed 30%, reaching about 350-3.6 million tons, returning to the historical average level. The supply and demand pattern of American cotton is about to change in the new year, and the fundamentals do not support the continuous upward trend of American cotton prices. In addition, the previous focus on American cotton delivery inventory part of the financial attention has also shifted, CFTC non-commercial positions net long single rapid decline. Overall, the above problems are difficult to reverse in the short term, American cotton futures prices continue to be under pressure, but the current American cotton futures prices have returned to rationality, the lower space is also limited, it is expected that under emotional disturbance, American cotton will still fluctuate widely in the short term.
7. Domestic market: inventory supply is abundant, retail data is weak, Zheng cotton futures price follows American cotton pullback. Intensive economic data released this week, domestic textile and clothing retail sales rose less than 4% in March compared with the same period last year, the increase slowed sharply compared with the same period last year, the performance of terminal consumption is weak, and the peak season of demand for "gold, silver and silver four" is expected to fail. From the high-frequency data, the start-up load of textile enterprises has not improved significantly, the foreign trade order of some coastal areas has increased to a certain extent before, but the sustainability is not strong, and the demand support is weakened. From the point of view of inventory supply, China imported 400000 tons of cotton in March and 1.04 million tons from January to March, a record high in nearly 10 years. Cotton supply is abundant and there is no worry about shortage. According to the data, cotton consumption reached 900000 tons in March, or some cotton consumption was not transmitted downstream, or it was stored in some form. Overall, the current new cotton planting period, the weather is the focus of market attention, it is expected that the weather disturbance this year will be relatively limited, because it is difficult to become worse than the same period last year, short-term cotton prices lack support, but the downward drive is also insufficient. It is expected that short-term Zheng Mian under the influence of American cotton, the price center of gravity may have a small downward shift, but the range will not be too large, with concussion slightly weaker way of thinking.
Concern: macro disturbance, weather change, downstream demand.
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