After two consecutive weeks of strong gains, ICE futures finally peaked and fell last week (October 26-30). With the second outbreak of the epidemic in Europe and the United States and the approaching U.S. election, many commodities such as European and American stock markets and crude oil have once again begun to plummet. ICE cotton futures have finally not been immune to this bad luck. The market seems to be “possessed” by the Halloween epidemic and the election. .
Although the long-term upward momentum of cotton prices has not changed so far, the performance from last Wednesday to Friday did make cotton prices begin to truly “examine themselves.” On October 30, the main ICE futures 12 contract once fell to nearly 68 cents. From the current point of view, cotton prices can maintain their upward trend even if they fall to 67.50 cents. However, there are too many uncertainties in the U.S. election, the epidemic, and USDA supply and demand forecasts in the coming period. Some positive aspects of U.S. fundamentals have been digested in the market. Next week’s supply and demand data will be crucial to the trend of cotton prices and will directly affect the trend of cotton prices. affect future price trends. It is expected that cotton prices may continue to consolidate between 65-70 cents before the supply and demand report.
The Wall Street Journal published a bullish report on cotton earlier last week. There is a saying in the market that when newspapers start running front-page stories about rising commodity prices, it means the move is almost over. The Wall Street Journal article was written on Tuesday night, and the market had begun a more than 200-point decline on Wednesday morning. There are many examples of this activity in commodity trading.
At present, there is no way of knowing how much gasoline is left in the engine of rising cotton prices. From the current point of view, the market rise has shown its exhaustion. After fully completing the historical task of V-shaped reversal, I am afraid that it will really take a break in the short term. In addition, there are only three weeks left until the delivery of the December contract. The liquidation of fund long positions may cause significant price fluctuations. The price trend is still under the control of speculative funds. Since December 27, the December contract position has decreased by 600,000 packages. This It is a signal for funds to withdraw. If the situation worsens, the price may be difficult to hold. On the contrary, if the fund continues to be bullish on the market outlook and just rolls its position to the far month, then the cotton price will maintain an upward momentum after the rollover.
Right now, the market is waiting for the answer to the USDA supply and demand forecast on November 10, which determines whether the fund will stay or go. At the same time, in the face of blockades caused by the second epidemic in Europe and the United States, the market must also be cautious about the prospects of cotton demand. </p
