Both Sides Are Temporarily Clamoring For ICE And Cotton Futures.

Since late November, the main contract of ICE has been continuously consolidated in the 64-67 cents / pound compartment. It is difficult to test up to 68 cents / pound, 70 cents / pound. The US has signed a strong export contract, and the US three quarter economic performance has been well supported.

Some institutions and international cotton traders believe that the short-term impact on the trend of ICE includes the following four points: first, the Sino US trade consultation once again released a positive signal, but the substantive action is not big. Recently, US President Trump signed the Hongkong human rights and Democracy Act, and the US Navy vessel once again intruded into the 12 nautical miles of the South China sea reef to question the prospect of Sino US negotiations.

Two, since December 2nd, China will launch 500 thousand tons of high quality new cotton procurement and storage, and the impact on ICE and other external markets needs to be observed. Although the rotation of 500 thousand tons of Xinjiang cotton has reduced the lint supply of global and China 2019/20, taking into account the "bid price ceiling" (that is, down auction), after November, the purchase price of Xinjiang seed cotton has slipped, and the pressure of spinning cotton sales is relatively large in 10/11 month, which may suppress the price of zhengmian and ICE.

The three is the difficulty of short-term Sino US stalemate. Whether the US will levy tariffs on imports from China in December 15th will become the focus of investment and cotton enterprises concerned.

Four, considering the time issue, Chinese enterprises will continue to cancel the 2019/20 cotton textile contract or postpone the negotiation until 2020/21.

From traders in Qingdao, Zhangjiagang and other places, the US cotton shipping date is concentrated in 12/1/2 months, and EMOT/MOT and ME varieties are the main ones (C/A, ALACA) in 2019/20, ranking 31-4 and 41-4 are relatively high. Textile enterprises in Henan, Jiangsu, Shandong and other places indicated that before the February shipment, the US cotton market was not only of a low grade, but also had a fracture strength ratio of 28GPT and below.

At present, China's main port bonded and shipping period 2019/20 and 2018/19 cotton only offer us dollars (no RMB price). In the case of China's levy on the US cotton tariff has not yet been abolished, and 1% of the cotton import quota has been leased and transferred very few, the seller has no initiative to pass the cotton trade.