The good news from the Sino-US trade negotiation was favorable for the international market

The good news from the Sino-US trade negotiation was favorable for the international market, and the Zhengzhou cotton futures and ICE cotton futures are the basis for Xinjiang cotton and international cotton. ICE cotton futures market stabilized first under the support of buying from Southeast Asia, while Zhengzhou cotton futures market rebounded driven by lower trading proportion of reserved cotton, narrower price spread between domestic and foreign cotton, lower yarn inventory and the release of sliding-scale duty quotas. Inquiries and sales of imported cotton have improved somewhat, and prices of cotton quotas under 1% tariff declined. Moreover, with the bullish anticipation, China is likely to procure US cotton or reserve US cotton into state warehouses. In short run, price spread between domestic and foreign cotton is still likely to narrow.