Since December 22, ICE cotton futures have achieved a wave of “eight consecutive positives”. The main contracts have broken through resistance levels such as 75 cents/pound and 77 cents/pound without any blood, approaching 80 in the session on January 4. Cent/pound key points. Judging from the current market sentiment, external news and technical aspects, long funds and long positions are more confident to open the 80 cents/pound mark.
Several international cotton merchants and large import companies said that the driving forces that triggered the continued rebound of ICE and foreign cotton spot mainly include the following points:
First, the US$900 billion fiscal stimulus in the United States has The plan was approved by both parties at the last minute. On October 20, the U.S. Congress finally reached an agreement on a $900 billion stimulus plan aimed at boosting the U.S. medical system and stimulating the economy that is in trouble under the weight of the COVID-19 epidemic. U.S. stock markets and commodity futures rose;
Second, global agricultural products are in a cycle of rising prices. The impact of the epidemic has brought about expectations of food shortages and price increases, which will be reflected in the bulk commodity market and trigger an increase in food futures prices, superimposing corresponding speculation and speculation, further driving the instability and volatility of food prices. In the international agricultural products, oils, oils, and corn have seen the largest increases, while in the domestic market, corn and soybeans have performed most eye-catchingly, both hitting record highs;
Thirdly, with the “huge” amount of new currency being injected in 2020, big inflation is inevitable. . According to the latest released data, the world’s eight major economies added US$14 trillion in currency in 2020. This is an unprecedented and shocking data that has never happened in human history. Which field does this currency flow to? The price of cotton has risen sharply, so this is the fundamental reason for super inflation and high asset price bubbles; in 2020, the total monetary investment of the world’s 12 largest economies will reach 95 trillion US dollars;
Fourth, global cotton Supply fundamentals “just scratch the surface”. Mainly manifested in the overestimation of U.S. cotton production in 2020/21, Chinese buyers continuing to sign a large number of contracts to import U.S. cotton, the indirect “assist” of Pakistan’s production and sales and India’s CCI acquisition, and the significant decline in Brazil’s new cotton planting area, etc., which has provided funds, Speculators provide the “pedal” for speculation.
Despite this, the author judges that the long and short sides will start a stalemate and fierce battle at 80 cents/pound. It is not easy for the fund to open ICE smoothly and stand firm. It will not be achieved overnight, and good things will take a long time. , the main reasons are as follows:
First of all, the real risk in the world is still the resurgence of the new crown epidemic. European countries have fallen again, the epidemic in the United States is out of control, and the epidemic in Japan, South Korea and other countries has clearly risen again. The global prevention and control situation is very Not optimistic; secondly, the risk of global political conflicts has increased, and the situation in the Middle East has become increasingly tense. OPEC+, composed of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, is divided on whether to increase crude oil production in February. Saudi Arabia opposes increasing production, while Russia Taking the lead in calling for an increase in production on the grounds of demand recovery, the gains in crude oil futures and black commodities may come to an abrupt end. </p