On December 23, the cotton market staged a beautiful rebound before Christmas. The external market Dow Jones stock index, agricultural products, crude oil and metals all turned red after opening, while the US dollar index fell again. The above environment has greatly stimulated the cotton market. In addition, last week’s weekly US cotton export report still performed very well, giving cotton prices more momentum to rise.
On the same day, soybean futures on the Chicago Board of Trade (CBOT) hit a six-and-a-half-year high, as labor strikes in Argentina continued to cause supply problems, overshadowing the impact of recent rainfall in drought-stricken Argentina. The S&P 500 index of the U.S. stock market managed to end higher on Wednesday, as expectations for a stimulus package and a drop in initial jobless claims last week pushed investors to put money into industries most likely to benefit from the economic reopening after the epidemic.
The U.S. dollar index stopped rising and fell back. Long-term traders expect that 88 in 2018 will be the support for the upcoming challenge of the U.S. dollar. This is because vaccination and the passage of economic stimulus packages by Congress are unfavorable to the trend of the U.S. dollar. Judging from last week’s U.S. cotton exports, the purchasing volume of various countries did not decrease during the surge in ICE futures. China is still the leader and has signed contracts for next year. The number of U.S. Pima cotton contracts has also increased significantly. The active procurement of various countries reflects the current situation of empty inventory in the textile industry chain.
According to statistics, since the end of November, the total contract volume of US cotton has remained at 100,000 tons for three consecutive weeks. The cumulative contract volume this year has reached 2.53 million tons, completing 77.4% of the USDA export forecast. On the 23rd, the ICE cotton futures March contract closed 1.32 cents higher, with a settlement price of 76.14 cents per pound, an increase of nearly 2%. As of December 23, the March contract fell by 1.13 cents this week, but it has risen by 3.88 cents this month and 5.25 cents this year.
On Christmas Eve, December 24, ICE futures closed half an hour early. The market was closed for Christmas on Friday, and trading resumed on Monday, the 28th. Technically, the March contract’s lower support levels are 74.30 cents and 73.10 cents, and its upper resistance levels are 77.40 cents and 78 cents. </p
