Recently, the trends of sugar futures and cotton futures markets are very different, and it is necessary for investors to pay close attention to relevant data. The following is an in-depth analysis of the specific situations of these two markets.
Brazil’s sugarcane harvest accelerates
Recently, the Global Commodity Insight Report released by Standard & Poor’s showed that due to the appropriate climate conditions at the end of May, the efficiency of sugarcane harvesting and pressing operations in southern and central Brazil has improved. The region is expected to crush sugarcane in late May to reach 45.91 million tons, an increase of 1.2% year-on-year. At the same time, sugar production is expected to be 2.84 million tons, a year-on-year increase of 4.7%. This growth trend has had a significant impact on the supply pattern of the global sugar market.
Domestic sugar prices are down
Guangxi Sugar Manufacturing Group set a price range of 6050 to 6140 yuan/ton on the spot quotation, which generally fell by 20 yuan/ton compared with the previous quotation; Yunnan Sugar Manufacturing Group also adjusted its quotation to 5820 to 5860 yuan/ton, with a decrease of 20 yuan/ton. During this period, the raw sugar futures price continued to show a weak trend due to the market’s expectations for increased production. The domestic sugar price fell below the integer level of 5,700 points yesterday. Although the basic price difference remained strong, the market did not rebound significantly. It is expected that futures prices will continue to show a downward trend, and investors need to pay close attention to the changes in subsequent import data.
US cotton prices fluctuate slightly
On Wednesday, ICE US cotton prices showed a slight decline, down 0.01%, and the final trading day closed at 67.7 cents per pound. Meanwhile, the price of the CF509 contract rose slightly from last week, up 0.33%, and ended the transaction at a price of RMB 13,540 per ton. In addition, the holdings of the main contract increased compared with last week, up 7,234 lots month-on-month, and the total volume reached 545,800 lots. The ex-factory price of cotton in Xinjiang and the China Cotton Price Index of 3128B both showed an upward trend compared with the previous day. This change shows that the domestic cotton market has certain room for growth.
International Cotton is concerned about macro
In the field of international trade, the overall driving role of US cotton is not significant, and market focus mainly shifts to the macroeconomic level. The Consumer Price Index (CPI) released by the United States is slightly inferior to market expectations, which in turn triggered fluctuations in the US dollar index and showed a weak trend. At the same time, the planting speed and budding rate of American cotton have decreased compared with previous years, but the proportion of high-quality cotton has remained stable, while the proportion of inferior cotton has decreased. According to the analysis results, it is expected that the US cotton prices traded by the International Cotton Exchange (ICE) will continue to show volatility in the near future.
Domestic cotton market demand improves
In the domestic market, China and the United States have reached a framework for the agreement in principle, and we need to continue to pay attention to the announcement of subsequent specific details. In terms of yarn production, the start-up load showed a slight increase, and the improvement in demand conditions had a positive effect on cotton prices. Despite this, the inventory accumulation problem of textile enterprises has not been effectively solved, and they still face certain operating pressure. Despite this, the weaving factory currently holds insufficient raw material reserves and is expected to replenish inventory in the future. This move may provide some support for the continued rise in cotton prices.
Sugar cotton market outlook
The increase in Brazil’s output has had an adverse impact on the sugar market, causing the futures price to show a relatively negative trend; despite this, the cotton market has seen a price increase due to the improvement of downstream demand, but Zheng Cotton Futures Price may encounter the problem of limited room for upward in the short term. When conducting operations, investors need to consider various factors in a comprehensive way and closely track the immediate changes in relevant data.
When discussing the future development trends of the sugar and cotton futures markets, which market do you prefer to have the potential? Welcome to like, share this article, and publish your unique insights.
Leave a Reply