As the cotton market struggles to maintain its bullish image after last week’s month-end sell-off, some speculators are suddenly disbelieving in the market’s true underlying trend. Moreover, declines in grain markets and other commodities have weighed on cotton.
On March 2, ICE cotton futures resisted the pressure of selling, and did need some adjustments after the sharp rise the day before yesterday. After hitting highs last week, cotton is in desperate need of new good news to help it maintain its bull market pattern, as progress on the U.S. $1.9 trillion economic stimulus package awaits approval by the U.S. Senate.
In the next few days, the cotton market will receive some decisive news, including Thursday’s weekly US cotton export report, Friday’s employment data and next Tuesday’s USDA supply and demand forecast. All of this data warrants optimism at a time of market pullback.
For Friday’s U.S. employment data, traders believe that as vaccinations accelerate, non-farm employment should increase. Analysts expect 180,000 new non-farm jobs to be added in February. That’s up from 49,000 in January.
On Thursday, OPEC+ will meet to discuss crude oil production. The market generally believes that global crude oil production will increase by 500,000 barrels per day. The theoretical basis is that as the new crown epidemic dissipates, crude oil demand will increase.
Analysts believe that overall, cotton demand remains strong, but prices are somewhat overestimated. Current cotton prices may expand the US cotton area to more than 13 million acres. USDA intentions at the end of this month The cotton planting area will set the tone for the general direction of the market in the later period. </p
