jackpotgameml| US cotton rebounded to 82.6 cents, Zheng cotton hit 15600 yuan, focusing on changes in supply and demand under neutral strategy

News summary

US cotton prices rebound due to drought and export datajackpotgamemlHowever, supply and demand may turn loose. Domestic Zheng cotton rose, with limited fundamental improvement; we paid attention to weather changes and order conditions. Pulp supply is disrupted, overseas driving is strong, downstream demand is declining, and it is bullish in the medium term. International sugar producers of white sugar are expected to produce high yields, low domestic inventories, and support for short-term prices. Strategies are neutral and more neutral.

Newsletter text

[Meimian and Zhengmian Marketsjackpotgameml: Price rebound and shift in supply and demand pattern] U.S. cotton prices rebounded significantly this week under the dual benefits of easing dry weather in major producing areas and strong export data. Prices once climbed to 82jackpotgameml.6 cents per pound. Although a large number of new cotton is on the market in the southern hemisphere and Brazil and Australia have strong expectations for high yields, the drought in the U.S. cotton-producing areas has improved significantly compared with last year. It is expected that the output in the new year will resume growth, and the supply and demand pattern in the international market may gradually become loose.

[Zheng cotton market: strong rise and stable fundamentals] Domestically, Zheng cotton also experienced a strong rise this week, reaching 15600 yuan/ton at one time. This increase was mainly due to the market's oversold rebound, and the fundamentals did not improve significantly. The supply side is currently abundant in resources, and cotton imports have increased significantly from January to April. The reduction in new cotton planting area was not significant, and climatic conditions had no significant impact on the growth of new cotton. On the demand side, the market has entered a off-season since May, orders are scarce, and some textile companies plan to reduce operating rates.

[Cotton Market Strategy and Risk Warning] Although short-term cotton prices still have some support due to weather risks and industrial chain accumulation, there is insufficient upward momentum. Investors need to pay attention to later weather changes and downstream orders, and at the same time be alert to macro and policy risks.

[Pulp Market: Analysis of Supply Disturbance and Demand Dynamics] Quotes from overseas pulp mills continue to increase. Affected by recent supply disturbance events, short-term overseas market drivers have significantly increased. In the medium term, there will be limited investment in softwood pulp production capacity in 2024, and the shutdown of equipment may lead to a reduction in supply. Domestic pulp imports remain high, but European demand has improved and China's import pressure may ease.

[Pulp Market Strategy and Risk Warning] Although internal and external fundamentals are differentiated, if negative feedback from downstream demand continues to accumulate, it may create resistance to pulp prices. The domestic pulp market relies on imports and is affected by overseas costs, so the view of maintaining an upward trend in the short term remains unchanged. Investors should pay attention to changes in external quoted prices and exchange rate risks.

[White Sugar Market: Analysis of International and Domestic Supply] In the international market, Brazil's sugar production ratio in the new crushing season is expected to remain high, and the probability of maintaining high yields is high. The minimum purchase prices of sugarcane in India and Thailand have been raised, sugar beet planting area in the EU is expected to recover, and raw sugar prices may weaken further in the medium term.

[White sugar market strategy and risk warning] Domestic domestic sugar entered a de-warehouse cycle in April, and industrial inventories increased year-on-year but were at a low level during the same period. Sugar imports decreased in the second quarter, and spot prices resisted decline. The peak summer consumption season is approaching, and sugar prices will have certain support in the short term. Investors need to pay attention to weather changes in Brazil, port shipping pressures, and macro, weather and policy impacts.