Before the Spring Festival, the USDA supply and demand report set a positive tone, raising the 2020/21 U.S. cotton export forecast and lowering the ending inventory. During the Spring Festival, the weekly US cotton export report performed strongly, with upland cotton shipments hitting an annual high. In addition, due to increased demand for corn and soybeans, market expectations for a decline in cotton planting area have increased. During the five trading days of the holiday, U.S. cotton rose by 2.54% and once hit a two-and-a-half-year high. After the holiday, attention will be paid to the sustainability of U.S. cotton demand and whether the expected production reduction can be further confirmed.
According to the latest data released by the CFTC, as of the week of February 9, the net short positions in cotton held by hedge funds and large speculators increased to 91,704 lots, ending the previous continuous decline. Among them, non-commercial long positions were 102,413 lots and short positions were 10,709 lots.
The U.S. cotton export weekly report shows that from January 29 to February 4, the total contract volume of U.S. cotton was 445,500 bales, the highest level in seven weeks. Among them, the net contract volume of upland cotton this year is 275,400 bales, the net contract volume of upland cotton next year is 170,100 bales, and the US upland cotton shipment volume is 433,600 bales, setting a record for this year.
Currently, the market is paying attention to the U.S. cotton export weekly report released this week, which was postponed by one day due to U.S. Presidents’ Day, and the preliminary forecast of global supply and demand for next year at the upcoming USDA Agricultural Outlook Forum. </p
