U.S. cotton exports of the recent fundamentals remain weak

First, the latest weekly export bad:


The United States Department of Agriculture (USDA) released the latest week, the U.S. cotton export weekly export data was disappointing last week greatly reduced.


2.26 cut-off date the week, net sales for the United States upland cotton 240,300 bales last dropped 59%. And over the previous four weeks dropped by an average of 22%. China accounted for one of 88,700 bags, last dropped by nearly 70%.


Noodle market and economic concerns affecting the deterioration of the purchase will, because this week released a series of economic data indicate the global economy is still poor, still not to the worst of times. Terminal clothing consumption continues to decline forecast.


International Cotton Advisory Committee (ICAC) 3 released a global production and demand prediction :08-09 annual global cotton consumption is expected to 23,800,000 tons, up 9 percent reduction, with great powers of cotton textile production will continue to decline.


Second, the deterioration of consumption remains in the terminal:


Global end-consumer from clothing retailers finally reflected in the current situation: According to a Reuters report, the United States several biggest clothing retailers at the February sales have fallen sharply, and is expected to clothing retailers in February at 8.6 percent sales decline , department stores will be down 10.1 percent. Department stores have one of Saks CEO Steve Sadove said “This wave will be a decline in the company’s 84-year history on the most serious challenges.” And then brought about by retailers are on business strategy to reduce inventory levels, some retailers said that in the before the economy picks up, in order to prevent the final loss in 2009 would be unreasonable to reduce the proportion of textile and apparel inventory. This means that not only terminal weak consumption between aspect in reducing the inventory of cases, the level of the upstream industry shipments increased more heavy pressure.


Three long-term supply and demand must have support:


09-10 annual global cotton supply and demand will be better than this year.


The main reasons for the new year’s global cotton plant is expected to be reduced, reduced earnings competition crop prices and increased production inputs and other factors will lead to farmers switching to other crops. According to the latest ICAC estimates ,09-10 years of global cotton acreage to reduce the 3%, one of the main producing countries, China and the United States will reduce the plant size, India will increase production.


09-10 and the annual state of the economy is expected to be more improved this year ,08-09 the annual cotton consumption has dropped by 9%, while the 09-10 year projected global cotton consumption flat over the current year and 10-11 year will rise slightly.


Overall, this year’s global cotton ending stocks are expected to reduce by 1% year-on-year, and at the end of next year’s 3 percent decline in inventory, supply and demand at the surface of better than 08-09 years.


On the other hand, this year because of Chinese and Indian cotton farmers protection policies, the U.S. cotton cotton relative to domestic real estate and Indian cotton more obvious price advantage, having sex with some resilience.


In summary, the recent American Cotton remains weak after falling do not see signs of upward reversal in the current domestic cotton prices as well as Indian cotton is relatively higher than in the case of U.S. cotton, the U.S. cotton futures fell space, However, shortly after taking into account the domestic cotton prices will begin to weaken in stages, and with plant area of uncertainty, the U.S. cotton market outlook remains vulnerable to judge more likely to shock the downlink.