How Does China US High Level Meeting Affect Cotton Market

 

This week, ice cotton futures continued to fluctuate in a wide range, ushering in a strong rebound after falling below the 83 cents / pound mark. In May, the contract continued to break 85 cents / pound and 88 cents / pound (closing above 88 cents / pound in the end). From the perspective of technology and market sentiment, long funds entered the market quickly driven by news, USDA report and the overall surge of bulk commodities. Some institutions and cotton related enterprises believe that the 80-85 cents / pound range of the main contract of ice futures this week is the best purchasing period for textile enterprises and traders. If it "fails", it will be a good opportunity to replenish the Treasury.

 

Why did ice suddenly "change its face" in one day, stop falling and rebound sharply? The continued weakness of the US dollar index, the record high of US stocks, the increase of US cotton contract volume, and the rise of commodity market are all non key points, which only add fuel to the flames and make the icing on the cake. The key factor that causes ice to reach 88 US cents / lb is the change of the external news, which leads to the stock market and the commodity market“ Riots "(especially agricultural products).

 

At the invitation of the US side, Yang Jiechi, member of the Political Bureau of the CPC Central Committee and director of the office of the Central Foreign Affairs Working Committee, and State Councilor and foreign minister Wang Yi will hold a high-level strategic dialogue between China and the United States in Anchorage from March 18 to 19, a Chinese Foreign Ministry spokesman announced.

 

This is the first face-to-face meeting between China and the United States since President Biden took office. The two sides have taken a "cautious first step" in rebuilding Sino US relations. It can be said that "one stone stirs up thousands of waves". The import and export trade of agricultural products between China and the United States will be one of the important contents of the meeting.

 

In 2020, the U.S. agricultural exports to China will rise to 55.5 million tons, accounting for a quarter of all agricultural exports. USDA forecasts that the US agricultural exports to China in 2021 are expected to reach a record $31.5 billion, which is $4.5 billion higher than the US Department of energy's forecast in November 2020. China needs to continue to make concessions on the basis of the first phase of Sino US trade agreement , triggered a rebound in the futures of corn, soybean, cotton and other agricultural products.