On March 8, ICE cotton futures fluctuated within a narrow range around the previous day’s settlement price. The market continued to pay attention to the progress of the Russia-Ukraine conflict and the fundamentals of cotton. On Wednesday, the US Department of Agriculture will release a new supply and demand forecast.
According to market forecasts, the forecast average of U.S. cotton exports this month is 14.89 million bales, higher than last month’s 14.75 million bales. The U.S. ending inventory is 3.37 million bales, lower than last month’s 3.5 million bales. Global ending stocks are expected to be 3.37 million bales, lower than last month’s 3.5 million bales. 84.31 million bales, the same as last month.
On the same day, the U.S. dollar index hit a new high intraday. After the outbreak of the Ukraine crisis, the U.S. dollar has been sought after by safe-haven funds, and the accelerated rise of the U.S. dollar has also created conditions for the Federal Reserve to start raising interest rates next week.
On March 8, ICE cotton futures closed up about 100 points, mainly driven by the sharp rebound of the Dow Jones Index. Earlier, the United States announced a ban on the import of Russian energy products, and the Dow Jones Industrial Average went from falling 200 points to rising 500 points, which also reduced the gains in the energy sector. In addition, the general rise in the commodity market also provides support for the cotton market.
Since the Russia-Ukraine conflict, although ICE futures have been impacted, the overall decline has been limited and has shown signs of stabilization recently. This is because the fundamentals of cotton are still relatively stable and U.S. cotton exports have continued to provide support for prices. However, after the Russia-Ukraine conflict and Under the influence of macroeconomic tightening, cotton prices have no motivation to rise significantly and will continue to be under pressure in the short term.
It is worth noting that due to the continued drought in the US cotton-producing areas, it is difficult to be optimistic about US cotton production next year, so the trend of the ICE new flower December contract is stronger. Analysts said that once weather speculation occurs later, the December contract still has the potential to rise.
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