In recent days, the main contract of ICE cotton futures has continued to consolidate near the 60 cents/pound mark, ready to fall below the strong resistance level at any time. Both bulls and shorts have been very cautious, waiting for fundamentals, external markets and economic aspects. Guidelines.
Although on June 9, local time, the Nasdaq hit a new high of 10,000 points after hitting a new high of 9,900 points on Monday, and the five major technology stocks also closed collectively, the U.S. stock market is still “thriving” “; Although the tropical storm bypasses the Texas Plateau, dry weather will cause Texas’ farm abandonment rate to increase significantly, adversely affecting the 2020/21 US cotton production and quality; despite OPEC+’s commitment to limit production, China 3 Driven by optimism such as record monthly crude oil imports, U.S. crude oil futures for July rose 2%, with a settlement price of US$38.94 per barrel, closer to US$40/barrel (ICE August Brent crude oil futures closed up 0.9%, with a settlement price of US$38.94 per barrel). 41.18 US dollars per barrel), but ICE cotton futures ignores many positives and is not interested in the pull of finance, stock market, crude oil, etc., and the overall market and disk direction are not strong.
What are the reasons that lead to the weak growth of ICE’s main contract above 60 cents/pound, and basically fall into profit-taking or wait-and-see? An international cotton businessman analyzed that there are several reasons:
First, the number of U.S. cotton contracts signed by China in the week of May 22-28 dropped sharply compared with the previous weeks. The “wind vane” has changed somewhat. Long, long Funds and cotton-related companies need to clarify their relationships and find directions; second, European and American countries have pressed the “restart button” on their economies as the epidemic slowed down, but there has been no retaliatory rebound in consumption of cotton textiles, clothing, etc., which is significantly lower than expected by all parties. , the global fight against the epidemic has turned from an “encounter war” to a “protracted war”, and the “shortcoming” of cotton demand will be difficult to make up for in a short time; third, the risks in the US financial, stock and bond markets have increased. On Tuesday, although the Nasdaq “whimsically” exceeded 10,000 points and hit a new high (the extraordinarily optimistic May employment data was actually an “own goal” created by Trump and the White House, the actual unemployment rate exceeded 16%), the S&P 500 Index and the Dow Jones Industrial Average fell sharply. The continued large-scale protests and demonstrations in the United States not only led to a surge in the number of new coronavirus infections, but also forced reopened retailers to close their doors again. The U.S. government and the Federal Reserve encountered bottlenecks in the U.S. economic stimulus measures, and the economy restarted. The recovery period of the trade, transportation and retail industries will far exceed expectations. </p
