On September 25, despite the tug-of-war on cotton fundamentals, the December ICE futures contract continued to climb upward.
So far, the new cotton crop in the United States in 2020 has been affected by a series of weather events. The first was Hurricane Hanna, which invaded the valleys of southern Texas and caused severe damage to the Rio Grande River. The cotton in the basin brought losses, and then Category 4 Hurricane “Laura” brought strong winds and rain to the cotton-producing areas of eastern Texas and Louisiana, and then Hurricane “Sally” hit the Delta region and the southeastern cotton area. Although the intensity Not big, but it still brought heavy rainfall to more cotton fields. Now, as the remnants of Tropical Storm Beta bring heavy rain to Tennessee and the southeastern U.S. cotton region. After these weather conditions, traders believe that the new cotton production in the United States in 2020 will undoubtedly decrease, and it will decrease every day, and the quality estimate is also very problematic.
As of September 17, the U.S. cotton export contract volume for the 2020/21 season has reached 7.722 million bales, compared with 8.4 million bales in the same period last year and 8.9 million bales in the same period in 2018. The average for the same period in the past five years is 6.45 million bales, the current US cotton signing progress has reached 57%, and the average for the same period in the past five years was 48%. Overall, the progress of U.S. cotton exports is not slow.
On September 25, ICE cotton futures closed higher, and the market was concerned about the threat to U.S. cotton production and quality caused by recent adverse weather. In the past few weeks, the United States has been hit by a series of hurricanes and tropical storms, and the cotton-producing areas have maintained low and rainy weather. Such unfavorable weather will undoubtedly delay the maturation of new cotton, which may result in boll rot or cottonseed germination. In any case, the quality of new cotton will be threatened, and losses in production are imminent. Some cotton farmers are beginning to worry about frost in the southern United States in October. If so, the direction of the market could change significantly, depending on its scope and scale.
On that day, the U.S. dollar index continued to strengthen, hitting its highest level since July 22. Amid rising Trump poll numbers and progress on a vaccine, currency traders are beginning to return to the U.S. dollar as a safe haven. Investors lost interest as renewed outbreaks in the UK and EU caused their currencies to depreciate.
Next week will enter October, which is also the beginning of the new cotton harvest. In recent years, cotton prices have usually hit annual lows around Thanksgiving. Technically, cotton prices need some new momentum to break through strong upward resistance. At the same time, the market atmosphere may become tense before the U.S. election on November 3. In the absence of new stimulus measures, the market may experience risk aversion and deeper adjustments. </p
