On March 24, the decline in ICE futures was hard to stop, and the market had reached an oversold level. It was supposed to have the potential to rebound, but even if the U.S. Dow Jones Index and energy prices rebounded, it could not stop cotton from falling.
At this moment, cotton demand seems to be powerless. Last week’s U.S. cotton export contract volume reached 130,000 tons, but cotton prices remained unmoved. Although the market is looking forward to tonight’s weekly U.S. cotton export report, under the circumstances of a strong U.S. dollar index and tense Sino-U.S. relations, I’m afraid it won’t change anything in the end.
As for the intended area of U.S. cotton at the end of the month, perhaps the area of U.S. cotton will decrease after this sharp price correction, but even so, because the current cotton demand situation has begun to deteriorate, and It is cotton consumption that has supported the rising cotton prices in the past year. Therefore, as long as the US cotton area does not drop significantly, it is difficult for cotton prices to rise.
In terms of weather, rainfall in Texas in the United States will exceed normal levels in the next 6-10 days and 8-14 days, and the drought situation in cotton fields may soon ease, paving the way for the upcoming new cotton crop. Create good conditions for sowing.
On March 24, the May contract of ICE futures hit the lowest level since February 4. At that time, the open interest of ICE futures also hit the highest level of nearly 260,000 lots. It began to decrease. As of March 23, it had dropped to less than 230,000 lots. The decline in market volume and price indicates that fund bulls are retreating.
On the same day, the US dollar index continued to rise. It should be said that it is now a technical rebound after the excessive decline in the previous period. Although the huge stimulus plan of the United States will lead to inflation, at least it has not happened yet. Recently, Europe and the United States have begun to join forces to suppress Xinjiang cotton, and the market sentiment in the external market has also dropped again and again. As of early trading on March 25, ICE futures continued their downward trend. </p
