Good Sino US Negotiations Gradually Release Cotton Prices Opened Up The Curtain

In December 19th, although the market is still analyzing the true meaning and content of Sino US trade agreement, if it does not happen, it will open up a path for the Sino US trade to go back to the right track, and China has indeed begun to increase its purchase of US cotton.

According to the US cotton export weekly released on Thursday, despite the slight reduction in the number of US cotton contracts last week, China contracted 5692 tons and 1270 tons of cotton and Pima cotton to the United States respectively, and the shipment of American upland cotton also began to accelerate, reaching 8051 tons, and the ring ratio continued to increase.

So far, China's import of US cotton has increased for weeks. The market believes that the Sino US negotiations have reached agreement on the export of cotton to China. So far this year, China is the second largest buyer of US cotton. It has signed a total of 1 million 880 thousand packages of cotton and cotton, plus the purchase of other countries. The signing rate of the US cotton has exceeded the level required for the USDA forecast, which is also higher than that of the last five years.

On the same day, ICE futures rose on the uplink of the US cotton export weekly and technological graphics. China's active purchase of US cotton has greatly boosted the confidence of traders. Traders are increasingly convinced that China will become a stable customer of the US cotton in 2020. At the same time, as cotton prices rise, the fund may shift from net to net.

On the technical side, cotton prices have been clearly improving in the medium and long term, and the rising trend has basically taken shape, which may attract a lot of speculative buying. Looking forward to 2020, some traders believe that China's imports will continue to increase, and that the decrease in the northern hemisphere's production and the potential depreciation of the US dollar are all the bullish factors in the market. The market once again proves that cotton prices usually have a turning point across the year, and there will be room for further increase in cotton prices in 2020.