crashlands| Everbright Futures: May 20 Soft Commodity Daily

SugarCrashlandsBrazilian production exceeds expectations and suppresses the performance of period prices

Raw sugar: the price of raw sugar continues to decline this week. Stimulated by high sugar pricesCrashlandsIn the new squeezing season, many countries increased production to varying degrees. Fengyi International expects sugar beet acreage in the European Union and the UK to increase by 6% during the 25th squeeze season in 2024, sugar production may exceed 17 million tons, and sugar exports may increase to 2 million tons. The planting area of Ukrainian sugar beet increased by 50.6% during the 2024x25 squeeze season, and the sugar output was about 190-2 million tons. Consulting firm Canaplan estimates that sugarcane intake in south-central Brazil will fall 9 to 6 percent from the 2023 season in the 25th squeeze season.Crashlands. 110.4 billion tons. If the weather is dry, the intake of sugarcane may decrease by 11% to 5%.Crashlands. 976.1 billion tons.

Domestic: spot quotation in Guangxi is 6510-6540 yuan / ton, which is lower than last week. The estimated price of imports within the quota is 5280-5340 yuan / ton; the estimated price of imports outside the quota is 6740-6820 yuan / ton.

Summary: in the new crushing season, many countries are expected to increase production to varying degrees, and various agencies have given varying degrees of expectations. Sugar in the European Union and the United Kingdom is expected to increase by about 6%, Thailand sugar is expected to increase by 15%, Ukraine is expected to increase by more than 10%, and Brazil is flat or 1.3%. It can be seen that under the stimulation of high sugar prices, various major producing countries have achieved an increase in planting, and the yield is expected to be cashed in the 24 / 25 squeeze season, so the futures price continues to be under pressure. Prices fell this week due to the higher-than-expected pace of Brazilian squeezing. In the second half of April, the amount of sugarcane crushed in south-central Brazil was 34.575 million tons, an increase of 61.30 percent over the same period last year; the ratio of sugar production was 48.37 percent, an increase of 4.84 percent over the same period last year; and sugar production was 1.843 million tons, an increase of 84.25 percent over the same period last year. After the futures price fell below 19 cents / pound, market confidence is fragile and is expected to remain short-term.

At present, domestic sugar sales are dominated by domestic sugar sales, because the previous sales progress is good, the inventory pressure is not great, and the price is relatively anti-falling. At present, with the adjustment of raw sugar, China follows the downward trend and maintains short thinking, but due to the support of spot prices, the decline is expected to be less than that of raw sugar.

Cotton: the fundamental support is weak and the rebound space is limited.

1. Supply side: global cotton production is expected to increase in 2024, mainly from the United States and Brazil. At present, the weather conditions are more suitable and the yield increase is expected to be strong.

2. Demand side: in the new year, global cotton consumption is expected to increase compared with the same period last year, clothing retail in the United States has improved compared with the same period last year, domestic textile clothing consumption has entered the off-season, and the start-up load of textile enterprises has decreased compared with the previous year.

3. Import and export: domestic textile and clothing exports improved month-on-month, the year-on-year decline narrowed, the price difference between domestic and foreign cotton imports fluctuated, and cotton imports decreased in April, but the import volume was still on the high side.

4. Inventory side: there is an obvious decline in clothing retail inventory in the United States, the total amount of domestic cotton industrial and commercial inventory is abundant, cotton inventory in bonded areas continues to accumulate, cotton yarn inventory in weaving mills decreases, and finished goods inventory accumulates gradually.

5. in the international market, the impact at the macro level is sustained, supply and demand in the new year is expected to be loose, and the fundamental support is weak. Recently, US economic data have been released one after another, Fed officials have spoken one after another, and the market's expectations of the Fed's interest rate cut are wavering. At present, market pricing is more inclined to cut interest rates in September, and it is expected that changes will have a greater impact on US cotton prices within the day. It is expected that the impact at the macro level will be sustained and repeated for a long time in the future. From a fundamental point of view, global cotton production in the new year is expected to increase strongly. USDA expects global cotton production to increase by 4.8% to 25.921 million tons in 2024 to 25, mainly from the United States and Brazil, while US cotton production is expected to rise by 856000 tons to 3.484 million tons over the same period last year. The current weather in the United States is suitable for cotton planting, and the cotton acreage affected by drought has dropped sharply compared with the same period last year, and there may still be some room for u.s. cotton production. On the demand side, although the global demand for cotton in the new year has also increased compared with the same period last year, the growth rate is only 3% on the basis of a low base. The pattern of global cotton supply and demand in 2024 is relatively loose, and the inventory at the end of the period is expected to increase, and the fundamental support is weak. It is expected that short-term ICE American cotton will fluctuate mainly in the interval under the disturbance of macro factors, lack of uplink support.

6. Domestic market: the upward drive is weak and the rebound space is limited. The current growth period for new cotton, the market focus on the supply and demand pattern in the New year, at present, the supply side of domestic cotton acreage in the new year is expected to be basically the same as the same period last year or a slight decline, but this year's weather conditions are good, per unit yield is expected to increase significantly, 2024gam25 domestic cotton production is expected to have more than 200000 tons year-on-year increase, USDA data have a certain upward space, ample supply. As the demand side enters the off-season of textile and clothing consumption, the start-up load of textile enterprises decreases seasonally, and it still takes some time for terminal consumption to recover, and the demand side has a certain drag on cotton prices. On the inventory side, cotton commercial inventory fell sharply in March and April compared with the same period last year, with a cumulative decline of more than 1 million tons in two months, but at present, commercial inventory is still at the historical average level in recent years, and there is no risk of short-term inventory shortage. however, it is necessary to guard against the market concern caused by the continued unreasonable decline in inventory in the later period. Overall, cotton prices experienced a sharp fall, market sentiment was released, cotton prices stabilized and rebounded, but the fundamentals support is weak, it is expected that this round of rebound space is limited, medium-term still under pressure, to maintain a weak shock trend.

Attention: macro, weather, inventory.

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