News summary
ICE cotton rose 0rubybingo.61% to 76.49 centsrubybingo, CF409 rose 0.23% to 15340 yuan, and China's cotton 3128B index rose to 16405 yuan. The planting progress of American cotton is good, with Zheng cotton experiencing short-term shocks and under pressure in the medium and long term. During the raw sugar period, Yunnan's sugar production increased slightly, domestic and foreign markets stabilized in the short term, and the medium-term trend was weak.
Newsletter text
[The cotton market is gradually showing signs of recovery] On Tuesday, U.S. cotton prices on the Intercontinental Exchange (ICE) climbed slightly by 0.61% to close at 76.49 cents/pound; at the same time, the China Financial Futures Exchange (CF) 409 contract also rose 0.23%, closing at 15340 yuan/ton. The factory price of cotton in Xinjiang also showed an upward trend, with a single-day increase of 64 yuan/ton to 16081 yuan/ton. In addition, China's cotton price index of 3128B rose 96 yuan/ton to 16405 yuan/ton. Although the unstable factors at the macro level of the international market have eased, the U.S. and cotton market is still moving forward with fluctuations. CFTC position data shows that the number of long and short orders in non-commercial positions has increased slightly month-on-month, implying that the market's long and short parties have a power game, but no obvious pattern change has yet been formed. The planting progress of cotton in the United States reached 44% on May 19, an increase of 11 percentage points month-on-month. There were no abnormalities in the planting progress and climatic conditions. In China's domestic cotton market, under the positive influence of macro sentiment, Zheng Cotton's main contract continued to rebound, but its positions fell month-on-month, indicating that the market lacks momentum for rebound and fundamental support is relatively limited. It is expected that the Zhengzhou cotton market will remain volatile in the short term and will still face certain pressure in the medium and long term. Market participants need to continue to pay attention to weather and inventory changes.
[Spot prices in the white sugar market fluctuated slightly] On the previous trading day, raw sugar futures prices were basically flat, with the closing price of the main contract at 18.57 cents/pound. In the spot market, the price range in Guangxi is 6500 to 6620 yuan/ton, and a small number of companies have raised their prices by 10 yuan/ton. The 2023/24 crushing season production of Yunnan sugar companies has come to an end on May 20. This crushing season starts on October 30, 2023 and lasts for 204 days. The final sugar production is expected to reach approximately 2.03 million tons, a slight increase of 19,000 tons from the previous crushing season. The raw sugar market has been at a low level for two consecutive days. The recent market has been mainly affected by Brazil's crushing progress. In the future, the market focus will shift to production estimates in the northern hemisphere. At present, Thailand's weather conditions have attracted market attention, but considering the long growth cycle of sugarcane, there is still uncertainty about its final growth. The domestic spot market is currently selling at a favorable price. In the short term, the futures market shows signs of stabilization and is expected to continue to be dominated by shocks. However, against the background of expected increases in output in major sugar-producing countries, the medium-term market trend is still biased towards weakness.
