Despite the rebound in U.S. cotton export signings last week, the main ICE cotton futures contract still fluctuated and fell below the 80 cents/pound mark on January 28. The bullish sentiment in the market and the market was suppressed to a certain extent, with daily trading volume rising and open interest falling. , indicating that the differences between traders and investors have expanded compared with the previous period. Some foreign businessmen and cotton importing enterprises judge that the short-term long and short sides are still in a stalemate and game in the range of 77-82 cents/pound. They are still in a state of “a top above and a bottom below”, and it is difficult to break through the box.
The fall of ICE below 80 cents this time was mainly due to four factors: first, long-end funds at the end of the month sold or moved positions to far months in order to avoid risks, and traders stepped on each other; second, The Federal Reserve stated in a statement that the recovery of economic activity and employment has slowed in recent months, and that the ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and will pose considerable risks to the economic outlook. risk. Such a pessimistic tone led to the collapse of the three major U.S. stock indexes and commodity futures, and ICE was dragged down; third, investors were opposed to Biden’s $1.9 trillion “American Rescue Plan” by Republicans and members of Congress, and the government once again significantly expanded the fiscal deficit. and pushing up government debt. Some institutions and investment banks believe that the final stimulus plan will be significantly reduced to US$0.9-1.2 trillion; fourth, as senior Biden administration officials or incoming officials have made intensive statements about China in recent days, the market has taken a wait-and-see attitude towards the direction of Sino-US relations. .
The author believes that although ICE has exceeded 80 cents/pound and has a tendency to move closer to 77 cents/pound, it does not have the motivation to “squat” to find the bottom. It will briefly fall back, stabilize, and consolidate. Later, it will return to the 80-85 cents/pound range (after several tests, the bottom of ICE really rose to above 80 cents/pound). Therefore, for domestic cotton textile enterprises and importers, 77-80 cents / pound or a relatively good opportunity to enter the market to sign contracts and obtain goods.
First of all, in 2021, in order to respond to the epidemic, revitalize the economy and increase employment rate, the United States’ “opening the floodgates” rescue method will not change. Ultra-loose currency is a high probability, and the inflation rate “has no highest, only “Higher”; secondly, global corn and soybean futures prices will rise sharply in 2020, and the imbalance in grain and cotton prices will inevitably lead to intensified competition for land among corn, soybeans, and cotton. Low cotton prices will cause farmers to abandon planting on a large scale; thirdly, the global epidemic is the worst The dark period has passed, and consumption of textiles, clothing, etc. is expected to continue to accelerate in 2021 until it reaches the level of 2019. The consumer demand for cotton in major textile countries such as China, Vietnam, India, Pakistan, and Bangladesh is ushering in recovery and explosive growth. </p
