Will continuous decline of cottonseed further weigh on cotton linter?

Recently, slower cottonseed sales have caused prices to continue declining. There is heavier wait-and-see sentiment in the cotton linter market, with prices shifting downwards.

Due to factors such as increased soybean stocks and ample supply of soybean in the new season, soybean prices have been continuously falling recently. Consequently, the overall atmosphere in the soybean meal and soybean oil markets leans towards bearishness, leading the commodity market downturn. Cottonseed meal and cottonseed oil have followed suit with a general decline. Currently, third-grade cottonseed oil prices in Shandong stand at 7,750yuan/mt, and in Xinjiang at 7,350yuan/mt. Due to the significant drop in oil and meal prices and its supply-demand dynamics, cottonseed oil mills have shown low procurement enthusiasm recently. Cottonseed offers in Shandong and Xinjiang are continuously being lowered to 3,320yuan/mt and 2,850yuan/mt respectively, down by about 200-300yuan/mt since early Jun.

Affected by the sharp decline in cotton prices and the continuous downward trend in cottonseed prices, the cotton linter market has seen increased wait-and-see sentiment. Since mid-to-late Jun, the market has weakened, with prices under pressure. Currently, cotton linter for industry-grade refined cotton outside Xinjiang is around 5,500yuan/mt, and around 5,100yuan/mt in Xinjiang, with a decrease of about 200yuan/mt.

In conclusion, due to increased imports of cottonseed from Australia and the United States, as well as weak oil and meal prices since early Jun, cottonseed oil mills have shown low procurement enthusiasm, creating a bearish sentiment in the cottonseed market. Cottonseed prices continue to weaken, with ongoing downtrend in the quotations in Shandong and Xinjiang, and with new cottonseed entering the market in Sep, the market is expected to remain prone to decline rather than rise. The cotton linter market has seen minor downtrend and is expected to maintain weak stability in the short term.