China Buzz

There was a pervasive negative tone to China’s lint markets today. Prices remain under pressure despite minimal gains around the country, especially in Henan and Hebei. Mill sentiment has not changed nor do we expect it to do so. On the import front, prices were stable to slightly lower with Brazil and Central Asian styles declining by .50 and 1.00 cents/pound, respectively. ZCE prices were 5 to 40 yuan/ton higher, save the distant November month, which dropped 10 yuan. May added 20 to finish at 11,995 yuan/ton, the equivalent of 79.61 cents/pound. The CNCE E-Forward Market closed mixed, down 22 to up 50 yuan/ton. The May contract added 39 to end the day 12,229 yuan/ton or 81.16 cents/pound. Seed cotton prices remain under pressure as the reserve procurement program dies down. Volume, in recent days, has been reduced as today’s scheduled allotment was only 19,800 tons split just about evenly between Xinjiang and inland provinces. To date, reserve purchases total just over 2.5 million tons with 1.3 million tons from Xinjiang and roughly 1.2 million tons from inland provinces.

The yuan is trading at 6.8348 against the dollar this morning.