According to feedback from cotton trading companies in Qingdao, Zhangjiagang, Shanghai and other places, in the past two days, the port bonded 2020/21 US cotton M 1-1/8 (strong 28GPT), US cotton EMOT 31-3/31-4 36/ The basis of 37 (strong 28-31GPT) is stable at 9.5-9.75 cents/pound and 10.5-11 cents/pound; while the basis of US cotton 31-4 and 36 with horse value of 2.7-3.3 is -1~1.75 Cents/pound, the price gap between high and low grade and quality indicators of U.S. cotton continues to widen.
A cotton company in Huangdao stated that the shipping schedule of US cotton in May/June/July is mid-grade 31-3/31-4/31-5, length 36-38, but horse value Only the ratio of 2.5-3.5 has increased significantly compared with March/April. Although the basis difference is relatively low, it does not match the actual demand of cotton spinning mills and middlemen. In addition, the cotton import quota within the 1% tariff is very tight, so regardless of The cargo is still port-bonded and customs-cleared low horse value US cotton/Brazilian cotton/West African cotton, etc. Although the quotations are not high, inquiries and shipments are still slow; but corresponding to this is the basic demand for medium-high quality and medium-high grade US cotton. Although poor, the performance is relatively strong, higher than the same quality Brazilian cotton by 2-2.25 cents/pound; higher than M 1-5/32 Indian cotton by 7-8 cents/pound.
Why is the basis difference between medium and high-quality US cotton so strong? The author’s analysis has the following points: First, the 2020/21 U.S. cotton has been “oversold” since mid-May (the remaining lint cotton in the United States is mainly low index and low spinnability), and the medium and high quality 2020/21 and 2019/20 The annual tradable resources are monopolized by international cotton merchants and exporters; secondly, the basis difference of the main competitors of US cotton exports, Brazilian cotton, Indian cotton, and Australian cotton, remains high. In particular, the price of Indian cotton is stable and upward at the CCI round benchmark price. India’s domestic epidemic has reached an inflection point and cotton textile and apparel companies have quickly resumed work and production. Third, ICE’s main contract fell below 85 cents/pound and 82 cents/pound. Southeast Asia, Turkey and other countries have emerged from the “swamp” of the epidemic. “, the enthusiasm for inquiry and purchase of U.S. cotton is rising; fourth, cotton areas such as Texas in the United States suffered from high temperature and drought in the early stage, and continued drops in late May, resulting in excessive soil moisture. Therefore, Texas and the Delta will seriously drag down U.S. planting in 2021. The “hind leg” of cotton progress is significantly behind previous years. </p
