On July 24, ICE cotton futures broke downward, the three-month slow recovery momentum came to an abrupt end, and the technical graphics trend was severely damaged. The early support levels of 61.20 cents and 61.60 cents in the December contract were both became history.
Last week, Sino-US relations further deteriorated. The United States first closed the Chinese Consulate in Houston, and China subsequently closed the US Consulate in Chengdu. Increasing tensions between China and the United States and a second consecutive week of bleak U.S. cotton exports have clearly overshadowed concerns about U.S. weather and production prospects. With China expected to stay away from the U.S. cotton export market, traders have become increasingly pessimistic about the demand outlook for U.S. cotton.
In terms of U.S. cotton exports, there are two weeks left in the report this year. The cumulative shipment volume is now 3.1575 million tons. The average shipment volume in the remaining two weeks needs to reach nearly 80,000 tons to complete the USDA of 3.3 million tons. Export forecast. Judging from the situation in recent weeks, U.S. cotton shipments are basically between 60,000 and 70,000 tons, and are decreasing week by week. Considering the current Sino-U.S. relations, U.S. cotton shipments are not optimistic, and U.S. ending stocks may continue to increase this year.
Currently, the US cotton contract volume for next year is 810,000 tons, a year-on-year decrease of 220,000 tons, of which China has signed nearly 280,000 tons, and another 300,000 tons are expected to be carried forward to the next year. Under the current situation, once China breaks the contract, it will be a huge blow to U.S. cotton exports. The Indian Cotton Company’s low-price sales of cotton stocks have also brought greater competition to the export market.
In terms of weather, three tropical storms may appear in the United States in the near future. One is “Hanna” approaching the southernmost tip of Texas, the second is “Gonzalo” in the Caribbean, and the third is forming in western Africa. of neotropical storms. With the recent increase in rainfall, the situation of new cotton seedlings in the United States has improved last week, and the forecast shows that thunderstorms will be more frequent in the main producing areas of the United States in the coming period. Although it is still difficult to judge the impact of the recent drought on Texas production, the positive weather conditions have gradually turned into potential negative effects.
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