According to data released by the CFTC, as of February 18, there were a total of 97,502 (equivalent to 2.21 million tons) unfixed call sales (Unfixed Call Sales) in the ICE cotton futures contract for 2021/22, which was a significant decrease of 9,139 from February 11. Zhang, the weekly decrease reached 8.57%. Statistics show that since mid-February, the ICE cotton futures May contract has successively fallen below 122 cents/pound and 120 cents/pound (the intraday low of 118.76 cents/pound), including China, Vietnam, Pakistan and other countries. Buyers’ sentiment towards price fulfillment increased, and ON-CALL transaction volume increased.
An international cotton trader said that due to the wide range of ICE’s main contract on February 24 and the impact of short sellers once again opening up the strong pressure level of 120 cents/pound, the price-point trading continued to be active and ON-CALL positions fell. On the one hand, cotton textile companies and traders currently have relatively sufficient cotton import quotas within the 1% tariff, so they can plug and play; on the other hand, ICE’s main contract fell from a high of 125.83 cents/pound to 120 cents/pound, and the price gap between domestic and foreign cotton continued Narrowing, the competitiveness of US cotton, Brazilian cotton and others has increased. In addition, some textile companies’ raw material inventories were stretched thin in February and March, and there was a subjective need to replenish inventories to ensure production.
Some institutions and cotton merchants said that the probability of short-term ICE market fluctuations is high, and it is recommended that cotton-related companies and speculators watch more and move less, and operate with caution. Influencing factors include how long the Russia-Ukraine conflict lasts, the role of the United States and the European Union in increasing economic sanctions on Russia, and the Federal Reserve’s interest rate hike in March may be “on the verge”, the intensification of supply and demand conflicts in global agricultural products due to the Ukraine crisis/drought in South America, and the second Sino-U.S. Whether the phased trade agreement negotiations can be started, etc., there is great uncertainty in the market and market sentiment. You need to be careful when buying bottoms below 120 cents/pound.
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