On February 9, traders adjusted their positions before the release of the USDA report. The March contract will enter delivery next Tuesday (February 22). Traders must transfer or close their positions before this Friday because next Monday is the U.S. On Presidents’ Day, ICE futures will be closed for one day.
The market’s average forecast for U.S. ending stocks is 3.29 million bales, slightly higher than last month’s 3.2 million bales. The average U.S. cotton export forecast is 14.93 million bales, down from 15 million bales last month. The forecast average of global ending stocks is 84.95 million bales, down from 85.01 million bales last month.
On the same day, ICE cotton futures closed slightly lower. The USDA supply and demand forecast shows that U.S. cotton exports are slightly lowered, with ending stocks increasing by 300,000 bales month-on-month, but global ending stocks decreasing by 700,000 bales month-on-month. As the U.S. cotton export forecast is lowered, this Thursday’s weekly U.S. cotton export report needs to see strong or even super-level U.S. cotton shipment data to offset the negative impact of the lower U.S. cotton export forecast.
Analysts said that as the market concentrates on transferring positions this week, ICE futures contracts for this year may be under pressure. If U.S. cotton exports do not exceed the level, the possibility of a sharp rise in cotton prices is small, and there is a high probability that the current range consolidation will be maintained. This Saturday’s NCC intention cotton planting forecast will affect the ICE operation early next week.
Since the Spring Festival, ICE futures have generally maintained a high and narrow range of fluctuations. Although market demand has been good recently, the news has been relatively calm. Cotton prices lack the motivation to continue to rise sharply. The market may need to find a new balance point to start the next phase of the trend.
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