On August 24, the news that two hurricanes were about to hit the southern United States made the market very excited. Traders were worried that the hurricanes would cause further damage to new US cotton. ICE futures quickly rose after opening, driven by speculative buying, 12 The monthly contract easily broke through the 65 cent mark and once stood at 66 cents.
At the same time, the Trump administration’s strong promotion of the application of the new crown vaccine has also excited the financial market. The three major U.S. stock markets collectively jumped and hit a new high in this round of rise. In addition, the strong performance of U.S. cotton exports and shipments last week continued to stimulate bullish sentiment in the market, with traders hoping that China would continue to expand purchases.
There has been a steady stream of good news in the market recently. After cotton prices broke through upward, technical graphics continued to strengthen, which may trigger more speculative buying. Of course, it is still unclear what consequences the coming and going of hurricanes will bring to new cotton. Whether China’s demand can be maintained after the price surge is still a question mark. There is a high probability that cotton prices will fluctuate significantly in the near future.
Judging from the latest seedling conditions, the growth of new cotton in the United States continues to improve, which is inconsistent with the dry and hot conditions generally believed by the market in the past few months. Perhaps the USDA will revise its forecast for US cotton production in September.
The latest CFTC position report shows that as of August 18, funds have purchased a net 1,061 contracts, with a net long position of more than 40,000 contracts. After Monday’s big rally, funds will continue to be net-long. What needs attention this week is the two hurricanes “Marco” and “Laura”. Although neither has reached high levels (Category 3 hurricanes and above), the violent storms brought to the cotton-producing areas of the United States still make the market worried. . The latest forecast shows that “Laura” will be upgraded to a hurricane on Tuesday, and “Marco”, although weak, will also bring heavy rain to the Delta region.
As of August 24, the December contract closed at 65.82 cents and the March contract closed at 66.63 cents. Driven by a combination of weather, Sino-US agreements, vaccines and monetary policy, cotton prices are expected to continue rising since April. </p
