sweetsuccessmegaways| Cotton futures fell 2.04%: U.S. cotton production expectations and downstream finished products dragged down prices

Newsletter summary

May 15thSweetsuccessmegawaysCotton futures fell by 2.Sweetsuccessmegaways.04%, at 14880 yuan / ton. Total inventory in Zhangjiagang Free Trade Zone decreased by 1.Sweetsuccessmegaways.29%. The sowing progress of American cotton was 33%, an increase of 2% over the same period last year. Brazil expects production to increase by 14.8 per cent to 3.6435 million tons. Institutions predict that the cotton market may remain weak and volatile, it is necessary to pay attention to orders and weather.

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Weak performance of cotton futures market

May 15, cotton futures market continued to show a weak shock pattern, the main contract closed down 2.04% to 14880 yuan.

The latest data show that as of May 13, 2024, the total cotton inventory in Zhangjiagang Free Trade Zone decreased to 49800 tons, down 1.29% from the previous week. Among them, the stock of bonded cotton was 40300 tons, down 0.01% from the previous month.SweetsuccessmegawaysThe inventory of non-bonded cotton was 9500 tons, down 6.32% from the previous month.

According to the crop progress report released by the United States Department of Agriculture, the progress of cotton sowing in the United States reached 33% as of May 12, up from 24% last week and up from 31% in the same period last year and the five-year average of 31%. In Texas, in particular, sowing progress also increased to 28% from 24% last week, in line with the five-year average for the same period last year.

Figures recently released by Brazil's state commodity supply company show that Brazil's cotton production in 2023 is expected to be 3.6435 million tons in 24, an increase of 14.8 percent from 3.1733 million tons in the previous year.

Hongye Futures pointed out that the pressure on the old American cotton crop is relatively small, the new crop is expected to increase production, and the supply side is expected to tend to be loose. In terms of new domestic crops, good weather conditions indicate a possible increase in production, and the import profits of cotton price differences at home and abroad may also lead to an increase in the number of imported cotton. However, the downstream opening rate continues to decline, finished goods inventory accumulation, despite the strong performance of the old basis, the overall lack of upward momentum in the cotton market, the market is expected to be mainly weak and volatile. Hongye Futures recommends that it continue to pay attention to orders and weather changes.

According to Donghai futures analysis, American cotton fell nearly 4% on the international market on Tuesday, hitting the lowest level in a year and a half, mainly depressed by good planting progress and improved weather conditions. ICE's July cotton contract closed down 3 cents at 74.63 cents per pound, the lowest settlement price since early November 2022. In the domestic market, Zheng Mian rose slightly to 15165 yuan / ton, with the highest intraday price of 15290 yuan / ton and the lowest price of 15120 yuan / ton. Zheng cotton prices fluctuate at a low level, adequate spot supply, obvious off-season characteristics of the downstream market, limited new orders, lack of corporate confidence, spinning profit losses, Zheng cotton market is expected to continue to show a weak operation situation.