After the sharp rise on June 1, more follow-up buying orders appeared in ICE futures on Tuesday (June 2). Cotton prices once rose by more than 100 points during the session, but the price fell sharply at the close, and the final increase Less than 50 points.
In recent days, news that Texas in the United States has suffered a moderate to severe drought has attracted market attention. Texas has issued a drought warning on May 28, prompting speculative short sellers to continue covering and attracting many bargain hunters. trading, stimulating cotton prices to continue to rise sharply.
Looking at the U.S. cotton sowing situation, as of the end of last week, the new cotton sowing progress in the United States had only reached 66%, which was lower than the 67% in the same period last year and the same as the average of the same period in the past five years. The sowing progress in Texas is 63%, higher than the 59% in the same period last year and 56% in the same period in the past five years. The progress in Georgia, the second largest cotton-producing state, is 74%, lower than 82% in the same period last year and 56% in the past five years. 78% over the same period.
According to current forecasts, temperatures in the entire central United States will be warm in the first half of June, rainfall in the south-central and southeastern regions will be above normal, while rainfall in Texas will be below normal. The market needs to pay attention to the latest drought warning report this week.
Last Friday, Trump announced that he would begin to revoke Hong Kong’s trade and travel privileges. China subsequently announced that it would suspend the purchase of soybeans and pork. The first phase of the economic and trade agreement is in crisis, and the two countries may erupt in a trade war again at any time. At this time, the U.S. unemployment rate is the highest in nearly a century.
Technically, the July contract has recovered half of its previous decline, triggering a lot of technical selling. Although the drought in western Texas in the United States is the reason for the price increase, there is still a lot of time before the US cotton harvest, and rainfall may still increase at any time. What the market should really be paying attention to is cotton fundamentals – weak demand and huge supply. If the Sino-US economic and trade agreement is terminated, cotton may have no way to escape. The recent widespread riots in the United States have had a new impact on cotton demand. The virus has not stopped consumers from shopping, but the ongoing riots have filled the shopping streets of many major cities in the United States with blood and danger.
The only thing the market can count on is the weekly report on U.S. cotton exports. However, under the current tense situation between China and the United States, the market is also mentally prepared for the suspension of U.S. cotton exports. In recent weeks, U.S. cotton signings have been After a sharp decline, order cancellations may continue to increase in the future. If it weren’t for China, cotton prices would have been “castles in the air.” </p
