Since December last year, the U.S. Department of Agriculture has continued to lower its global cotton inventory forecast and raised its global consumption forecast. In particular, the continuous decline in U.S. cotton inventory and production in recent reports has brought positive support to the market. In the early morning of May 13th, Beijing time, USDA will release a supply and demand forecast report for May, and the market is paying close attention to this.
Since the impact of the epidemic last year, global cotton stocks have risen to historical highs. As the epidemic in various countries has been controlled, clothing and textile consumption has gradually rebounded, and global cotton consumption has also continued to recover. As a result, global cotton inventories have continued to decline since December last year. By April, global inventories had been reduced to 20.35 million tons, a decrease of 890,000 tons from December, while consumption rose to 25.66 million tons, an increase of 490,000 tons from December. . Among them, US cotton inventories fell to a low of 850,000 tons in the past five years. The continued improvement in fundamental data provides strong impetus for rising cotton prices at home and abroad.
Due to China’s large purchases of U.S. cotton, U.S. cotton export contracts have increased significantly. However, under the expectation of a decrease in the U.S. cotton planting area in the new year, lower U.S. cotton inventories have become common in the market. consensus. At present, the US cotton export data in the USDA report is relatively conservative, and some industry players speculate that this report may continue to increase its export scale. At the same time, many market participants are full of expectations for U.S. cotton to continue to reduce production. Therefore, another inventory reduction may be a high probability event.
In addition, China’s cotton sown area has declined, coupled with the repeated occurrence of adverse weather in Xinjiang this year, the May supply and demand report may even lower China’s output in the new year. Of course, the outbreak of the epidemic in India may reduce consumption, but more market participants believe that it is an indisputable fact that US cotton is oversold this year, and the subsequent export contract volume is very limited. The impact of inventory reduction on domestic and foreign market prices is even greater. as key. Most industry players speculate that USDA’s May supply and demand forecast report may have more positive adjustments than negative ones. </p
