Since 2024, the outer futures have continued to rise sharply, as of February 27 has risen to about 99 cents/pound, equivalent to the price of about 17260 yuan/ton, the rising momentum is significantly stronger than Zheng cotton, in contrast, Zheng cotton is hovering around 16,500 yuan/ton, and the difference between internal and external cotton prices continues to expand.
This year, the United States cotton production down, sales to maintain strong momentum to promote the United States cotton continued to strengthen. According to the U.S. Department of Agriculture’s February supply and demand forecast report, 2023/24 global cotton ending stocks and production decreased month-on-month, and U.S. cotton exports increased month-on-month. It is reported that as of February 8, the cumulative export of the United States cotton signed 1.82 million tons, accounting for 68% of the annual export forecast, and the export progress is the highest in the past five years. According to such sales progress, future sales may exceed expectations, which will bring great pressure on the supply of cotton in the United States, so it is easy to cause funds to hype the future supply of cotton in the United States. Since 2024, the trend of ICE futures has reacted to this, and the recent high probability continues to run strongly.
The domestic cotton market is in a weak position relative to the United States cotton, Zheng cotton run to 16,500 yuan/ton driven by the rise in cotton, the future continues to break through the important threshold requires multiple factors, and the difficulty of rising will become more and more. It can be seen from the gradual expansion of the price difference between internal and external cotton, the trend of American cotton is significantly stronger than Zheng cotton, and the current price difference has expanded to more than 700 yuan/ton. The main reason for the upside down of the cotton price difference is still the slow progress of domestic cotton sales, and the demand is not good. According to the national cotton market monitoring system data, as of February 22, the cumulative domestic sales of cotton 2.191 million tons, a year-on-year decrease of 315,000 tons, compared with the average reduction of 658,000 tons in the past four years.
Because the market is not booming, textile enterprises are more cautious in purchasing, and the inventory is maintained at a normal low level, and they do not dare to store cotton in large quantities. At present, there are differences in the views of textile enterprises and traders on the trend of cotton prices, resulting in the enthusiasm of textile enterprises to purchase raw materials, some traditional yarn profits are low or even losses, and the enthusiasm of enterprises to produce is not high. Overall, the cotton city will continue the pattern of external strength and internal weakness.
Post time: Feb-29-2024