Cotton Is Eager To Focus On The Outcome Of Sino US Negotiations.

On January 7th, the US business delegation began discussions with the Chinese working group in Beijing on implementing the important consensus of the two heads of state in Argentina. This is the first round of talks between China and the United States after the start of the truce.

The negotiations are of great significance and will have an important impact on the commodity market. It is self-evident that cotton traders are also looking forward to the outcome of the consultation.

Starting from the first day of negotiations, domestic and foreign cotton futures rose, and the main CF1905 of zhengcotton futures rushed to the 15000 yuan / tonne pass. ICE cotton and cotton also rose to nearly a week high. In recent months, the contract reached the highest 73.92 cents / pound in more than a week.

Due to the partial closure of the US government, the US Department of agriculture (USDA) has postponed the release of relevant data, and the expectation of Sino US consultations has also been increasing under the direction of unclear cotton trend.

On the one hand, we hope that the Sino US negotiations will produce favorable results, China's demand can be improved and support for international cotton prices will be formed. On the other hand, we expect that tariff barriers can be resolved or China can increase its purchase of US cotton.

The consultations were extended to third days after the scheduled two days, and some investors were slightly disappointed. The emergence of foreign cotton fell again, which once again highlighted the good expectations of the international market for the consultation.

Although there has been no significant change in the purchase and sale of cotton in the spot market, the divergence of cotton prices has been increasing.

Recently, the mainstream of Xinjiang 28 cotton picking machine is quoted at 15400-15600 yuan / ton, and the mainstream price of hand picking cotton is 15600-15800 yuan / ton.

Some small scale production enterprises in the territory ensure that the lint is guaranteed through the resale to the producers or traders in the mainland. The enterprises with strong funds are still confident of the market, and the market structural contradictions are still outstanding, and the high-quality resources still have market competitiveness.

Most Cotton Traders expressed the hope that Sino US consultations would be favorable to land as soon as possible and reduce inventory risk.

In the early days, the ICE cotton market was down, and the price of imported cotton was also down. As the port and AAO cotton inventory was the first place in all cotton imports, the pressure of Cotton Traders was greater, and the price reduction of Australian cotton was obvious.

At present, the spot price of Australian cotton is stable at 16300-16400 yuan / ton, and the US cotton spot is 15500-15700 yuan / ton. In recent years, the focus of port cotton business has also shifted to Sino US negotiations. Some importers said that if the negotiations caused a sharp fluctuation in the external market, the sales strategy would be adjusted again.

In addition, from the recent US President Trump's Twitter "consultation with China went very smoothly", we can see that both sides hope that this consultation will be fruitful.

Therefore, regardless of the outcome, the outcome of this negotiation will have an important impact on the mentality and cotton prices of the operators.