The Cotton Market In The United States Is More Vulnerable Due To Reduced Demand For Cotton

Last week, New York cotton rose 800 points, American cotton The price is far away from that of other countries in the world Cotton price Unfortunately, the demand for cotton, which is already very small, is even less. Too much terrible economic news and the collapse of the integrated commodity market make the cotton market more vulnerable.

At the end of last week, the overall commodity prices plummeted, and the CRB index of 19 commodities fell to a six-year low. Market rise lacks fundamental support and demand lags behind. American cotton The quotation is no longer the lowest price in the world. In the past four trading days, it has been excluded from the calculation of Cotbook A index. The contract closed at 4137 in March, down 223 points on the same day, and lost 645 points in the week. In December 2009, the contract lost 551 points, and the closing price of that week was 602 points lower than the basic loan interest rate.

In the second half of the week, the market plummeted, causing growers to stop selling. Since the contract price hit a new low four weeks ago, the number of cotton traded this week was the smallest. In addition, the Chinese government intervened in the market, and the price of Chinese cotton fell. China is the largest buyer of American cotton, and the production capacity of many Chinese textile mills was cut by one third. Therefore, the government is trying to expand the daily number of domestic cotton purchases, aiming to stabilize the market.

American cotton depends on China's purchasing power, while Chinese textile factories depend on the health of the American economy and the demand of the United States for textile products. In short, the United States is the largest consumer country, and consumer countries have the final say. From the domestic perspective, except Wal Mart, retail sales in large stores have stagnated significantly from Thanksgiving to this Black Friday. The sharp rise in unemployment will weaken the sales of textile products.

      American Agriculture The Ministry will make adjustments to the report released last week based on this. In 2009, the U.S. agricultural export forecast was lowered by 14.5 billion dollars, or nearly 13%, because of the global economic recession, falling prices and weak demand. The US cotton export is expected to be US $4 billion, a decrease of US $1.9 billion from August. The US Department of Agriculture said that China's cotton consumption would decline year over year for the first time since 1998-99. The world economy is deteriorating, weakening consumer demand for textiles and depressing cotton prices.

In the cotton market, there was an 800 point short market correction space, with 1200 points of resistance above the adjusted world cotton price, about 48 cents. The fundamentals of this rising market are very fragile, which has been proved by the number of export sales in the past few weeks. However, the slump was still larger than expected. In the last two trading days of last week, the market opened higher and moved lower, indicating that the price will continue to decline.

However, China's infrastructure and restorative buildings have begun, so the market still has the opportunity to recover. If we see a new contract low again, the next five trading days will open a door of decline. If the market closes above 4800, the market may rise another 3 cents.

Next week, the US Department of Agriculture will release the December supply and demand report. If Cotbook and ICACA's global forecasts are close to the target, the USDA's global forecast will not be favorable.

However, everyone is waiting for the bad data to see if there are any surprises. Prior to the expansion of demand, the market rally was basically a technical rebound, but it was expected to provide sales opportunities.

Editor in charge: vivi