On March 1, ICE cotton futures opened higher, and the surge in energy, grain and metal markets gave cotton prices a strong boost. At present, the main driving force of the market is still the military conflict between Russia and Ukraine. In recent days, many countries around the world have implemented severe economic and social sanctions against Russia.
Last week’s U.S. cotton exports were really eye-catching. Not only did sales exceed 100,000 tons, but shipments also hit a new annual high. However, these all occurred before the Russia-Ukraine conflict, so traders are eager to know how the situation has changed last week. . It is reported that Maersk, the world’s largest container shipper, has stopped shipping to Russia, which may allow U.S. cotton and other U.S. exports to obtain more shipping ships. U.S. cotton shipments have seen significant growth last week.
Driven by external markets, ICE cotton futures rose sharply that day, with energy, metals and grains all hitting record highs. In addition to the financial market, news that Australia has suffered widespread flooding has also triggered market concerns about a reduction in Australian cotton production. Traders said that the cotton market is closely following other market trends, especially the crude oil and grain markets, and this situation is expected to continue. Much of the surge in cotton prices that day was based on concerns.
On Wednesday, Federal Reserve Chairman Powell will make a statement on U.S. economic and interest rate policies in Congress. This time he needs to be extra cautious and try to calm the volatile domestic and foreign markets. On the same day, the U.S. Energy Agency will release its weekly crude oil inventory report. In any case, in the current crisis in Ukraine, any data is moot.
Since the beginning of February, ICE cotton futures have fallen for nearly a month. The market immediately rebounded sharply on March 1, reversing the previous decline and regaining most of the lost ground. This is somewhat similar to the situation a year ago. From the current point of view, the impact of the Russia-Ukraine military conflict on the cotton market is limited. With energy, grain and other bulk commodities continuing to reach new highs, commodity inflation will further intensify, and cotton prices may still follow the external market. Pay attention to how the Federal Reserve makes decisions in the current situation.
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