Demand Is Picking Up Slowly, And Cotton Road Is Rugged.

Since last Wednesday (May 6th), the price of ICE Mei cotton has continued to rise, the main contract in July rose from 54.51 cents / pound to 57.46 cents / pound; the domestic cotton brand CF2009 contract first followed the rebound to 11800 yuan / ton, and then continued to fall, today maintained at 11400-11500 yuan / ton range concussion. From the short-term comparison, the situation of external strength and internal weakness is more obvious.

Judging from the upstream and downstream situation, according to the latest survey data of the national cotton market monitoring system in May, the number of days of conversion in the cotton industry is 35.7 days, a decrease of 15.3 days, a 30 day inventory of yarn, a decrease of 3.8 days, a row of 48.8 days, a decrease of 5.4 days, but all the same data are still on the high side. It can be seen that since May, the finished product inventory of downstream textile enterprises has declined compared with the original stock market, and market demand is slowly recovering. On the basis of feedback from upstream cotton trading companies and production enterprises, market enquiries increased at a stage, but overall sales process was still slow. Most of them still traded cotton futures at a low price point, while textile enterprises expected lower purchasing prices for lint, and some of them were difficult to complete. The above factors are sufficient to reflect that although the market has been repaired, the recovery level is weak.

From the point of view of supply competition, there is fierce competition between Xinjiang cotton and foreign cotton at home. Some cotton and American cotton in Brazil are slightly superior in quality, but Xinjiang cotton has great attraction because of its price advantage. Therefore, the accumulation of external cotton inventory is inevitable. At the same time, at home and abroad cotton supply situation, not only high foreign cotton inventory, domestic cotton inventory is also at a historical high. The remaining time in the current year is the off-season for textile enterprises, and the downstream digestion is limited. The subsequent inventory pressure remains to be released.

At present, with the gradual easing of the impact of foreign epidemics, the mentality of all sides in the country has been fixed. However, in the direction of trade between China and the United States, all kinds of news are mixed, and investors are divided. Therefore, whether or not it will affect the price of cotton in 5-6 months remains to be seen. In addition, wind blown sand and hail disasters occurred in some areas of Xinjiang, and the results of these impacts still need constant attention. In this regard, it is suggested that the operators should pay attention to the transformation of relevant factors, make a reasonable prediction of the impact of the short and medium term market, and control risks ahead of time.