Since the beginning of the new year, ICE futures have continued to rise steadily and hit new heights. At present, the March contract has risen to 70 cents, and the Sino-US agreement will not be signed for two days. The early benefits have been basically digested by the market, and the probability of high cotton prices in the short term is greater.
If the first phase agreement is successfully signed and successfully enters the more complex second phase, the market The upward momentum may continue, depending on the specific content of the agreement on cotton. So far, the benefits of the Sino-US agreement have been basically digested by the market. The mid- to long-term trend depends on whether China significantly increases its purchases of US cotton.
With the increase in prices, the overall sentiment of the textile supply chain has improved. Spin mills in many regions around the world have increased demand for raw materials, and speculative funds have responded to cotton. There are also changes.
Judging from the historical trend of ICE futures, prices basically fluctuate between 55 and 100 cents. From a technical perspective, after hitting the bottom of the range in 2019, cotton prices will advance towards the high point of the range in 2020, and it is obvious that the market has entered a bull market.
Currently, ICE futures have become overbought, and prices will continue to rise and require an appropriate correction. The main contract may fall back to around 67 cents, and then move towards 75 cents in the first quarter of this year. High impact. To achieve this goal, cotton prices must maintain a bottom line of 65-66 cents. In the rest of this year, cotton prices have the potential to rise to 78-80 cents, which may occur in the third quarter of this year, and will eventually hit 100 cents in 2021 or 2022.
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