Sino US Trade Frictions Escalate In US Cotton Stocks: Cotton Price Is A Dead End.

May 13th is the second black Monday in May.

The global financial market is again flowing into a river due to the negative impact of the failure of the Sino US negotiations.

It is worth mentioning that the announcement on the night of the "news broadcast" and other major media have demonstrated the tough attitude of China to the US side in upgrading trade frictions.

On the evening of 13, 9 o'clock, the announcement of the Chinese Ministry of Finance on improving the tariffs of us products was issued at the opening of the US stock market, which directly hit the US market. The Dow Jones index fell 500 points instantly, and ICE cotton futures plummeted to the limit.

Moreover, China's tariff increases began in June 1st. In the remaining ten days of May, Chinese enterprises can also take time to import and reduce costs, leaving room for the latter statistics.

While China and the US are raising tariffs, the outside world is also worried about the depreciation of the renminbi, and the Chinese government will sell the risk of US debt to hedge against trade friction.

After 18:40 on May 13th, the lowest value of the RMB against the US dollar on the shore was 6.8818, the lowest since the beginning of December.

It may not be long before the RMB will reenter the "7" era.

For ICE futures, there seems to be no minimum at present.

This online weekly issued a "Sino US negotiation that may change ICE or be beaten back to its original form".

In just a week, the main contract has dropped from 75 cents to 65 cents, heading for the lowest point of 55 cents in 2016, or even 40 cents from the 2008 financial crisis.

As of May 5th, the position of ICE cotton futures fund has been converted from net to net short. Last week's selling was about 15000 hands, plus the May 13th limit.

Even if the psychological impact of trade war is ignored, cotton prices are almost dead end.

The USDA's May monthly forecast for the new year is a real bad one. Good weather this year and the increase in US cotton output and stock in the end of the year will have a profound impact on the medium and long term trend of the market. Due to the escalation of Sino US trade war, there is no hope for us cotton export sales in the rest of the year, and China is still continuing to turn out reserves. There is only enough domestic cotton resources. Even if there is import demand, it is not related to the US cotton.

Under the impact of panic selling, cotton prices will decline this week, and there is no positive side to the fundamentals. The market is extremely short of confidence in the market outlook.

The only hope is the G20 summit held in Japan in June. It is said that Xi Jinping will meet with Trump at the summit. The market eagerly anticipate the meeting between the leaders of the two countries to bring confidence and boost to the market.