On March 10, ICE cotton futures rose sharply shortly after the opening. A considerable amount of bargain hunting and short covering emerged in the market, supporting the stabilization and recovery of cotton prices.
The day before yesterday, the market unexpectedly fell by the limit after the release of the bullish USDA report. Some analysts believe fund bulls are moving positions from this year’s contracts into the new year, triggering a massive sell-off. Judging from the latest data, the current May contract holdings are 100,000 lots, but the July contract holdings are only 50,000 lots, while the December contract holdings have reached more than 60,000 lots, which has exceeded the July contract.
Judging from the rise and fall on March 10, the December contract rose 102 points, surpassing the May contract (90 points) and the July contract (76 points), which was the largest increase among all contracts. of. Entering the latter part of the year, the market’s focus is turning to next year. The December contract will gradually lead the market trend, and the supply and demand side of this year will gradually take a back seat.
This Thursday’s weekly U.S. cotton export report is still critical. Since the market psychology is relatively fragile after the sharp decline, the market urgently needs to see positive numbers. Entering the second half of the year, U.S. cotton shipments are more important than contracted volumes. Important and more convincing. Judging from the situation in recent weeks, U.S. cotton shipments have remained around 70,000 tons. In the future, as long as U.S. cotton exports do not fall below this level, the task will be exceeded.
Regarding the new coronavirus relief bill passed by the U.S. Congress, some traders believe that it will trigger high inflation, leading to interest rate increases, while others believe that excessive money printing will help U.S. economic growth. The US dollar has been under heavy selling pressure in the past two days and has continued to fall.
On March 10, after experiencing a limit-down, ICE futures recovered moderately, rising by 200 points during the session. The lower US dollar and the Dow’s new high boosted cotton prices. Analysts said that cotton is currently attractive enough to attract more buyers. U.S. cotton will continue to consolidate its dominant position, and there is not much U.S. cotton available for sale now. If the cotton price stays at 90 cents for a long time, buyers may abandon US cotton and purchase cotton from other origins, but after the cotton price drops, US cotton will control the market again. </p