On September 7, the Federal Reserve released its Beige Book report on economic prosperity. The report believed that although inflation showed signs of slowing down, high prices and a tight labor market made the U.S. economic growth prospects overall weak. In the next 6 to 12 months, Demand is likely to weaken further.
After the release of the Beige Book, the three major U.S. stock indexes rose by more than 1%, with the Nasdaq rising by more than 2%. In fact, judging from various data released by the United States, the data affecting the Fed’s interest rate hikes conflict with each other, which seems to give room for the rate hike to be slowed down. Especially during the continuous sharp decline in crude oil prices, the main contract price of WTI crude oil has fallen to around US$82/barrel. The sharp decline in crude oil has also greatly slowed down the pressure of inflation in the United States.
Although the external market is more positive and optimistic, the domestic market is relatively cautious. Looking at cotton, it still maintains a slight fluctuation and continues to run weakly. According to the content of the last purchase and sales weekly report for 2021 released by the National Cotton Market Monitoring System, as of August 25, the national sales rate was 68.8%, a year-on-year decrease of 31.0 percentage points, of which Xinjiang sales were 66.1%, a year-on-year decrease of 33.7 percentage points; The cumulative sales of lint cotton were 3.989 million tons, a year-on-year decrease of 1.945 million tons, of which Xinjiang sales were 3.479 million tons, a year-on-year decrease of 1.760 million tons. It can be seen that the sales progress of Xinjiang cotton last year was slow and the remaining inventory was large.
Now new cotton is about to be launched in large quantities. Although Xinjiang cotton encountered insect pests during the fluffing period, it had little impact on the yield. The yield expectations are still high. The current national cotton market monitoring system predicts that the national output is 6.061 million tons, which is higher than the same period last year. According to the latest open-scale prices of cotton enterprises, the current open-scale price of civilian hand-picked cotton in southern Xinjiang is around 7.0 yuan/kg, which is also much lower than in previous years. When machine-picked cotton is launched in large quantities, it is expected that the price of seed cotton will still have room to decline. Therefore, with the Federal Reserve continuing to raise interest rates, the macroeconomy is under pressure, and the domestic cotton supply exceeds demand, the cotton market is not optimistic.
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