Cotton and Cotton Yarn Daily Report

Global aspect: In July, USDA released the global cotton supply and demand balance table for the new year. There was little change in cotton production in the new year, but consumption decreased, and global ending inventory increased significantly. On the US side, the USDA did not make any adjustments to US cotton production in July. Due to the recent slight increase in dry weather in the main cotton producing areas of the United States and China’s issuance of sliding tax quotas, the trend of cotton production in the United States has been more volatile. The sales situation of American cotton this year is still good, but the sales progress in the new year is relatively low. China’s issuance of sliding tax quotas has a significant positive impact on American cotton exports. The progress of cotton planting in India is accelerating in the new year, and it is expected that the planting area will not be too low. This year, the meteorological characteristics of El Ni ñ o are obvious, and attention will be paid to the cotton yield situation in India in the future. The general strong El Ni ñ o phenomenon will cause a decrease in global cotton production, and we will continue to pay attention to the weather and cotton production situation in major countries around the world in the future. Domestic market: Currently, the policies of rotational storage and sliding tax quota have been announced, and there is sufficient supply this year. On the consumer side, textile enterprises are currently consuming in the off-season, with average downstream orders. Most textile enterprises are currently operating at a loss, but with the upcoming Golden Nine Silver Ten, it is expected that the consumption situation will gradually improve. In the long term, the cotton planting area in the new year has significantly decreased and the weather has led to a decrease in per unit yield this year. It is expected that the final yield reduction will reach double digits, and cotton farmers are reluctant to sell and ginning factories have strong expectations of harvesting. Therefore, the cotton is expected to be strong in the medium to long term in the new year, with the first target price of 17000-18000 yuan/ton. In the future, as the new cotton is approaching its listing, the focus may further shift upwards.