On January 27, the external market put pressure on cotton futures. The Federal Reserve’s decision to raise interest rates on Wednesday and the Ukraine crisis made traders in many markets worried. Affected by this, the U.S. dollar index rose sharply, while gold and the Dow Jones Industrial Average fell sharply.
The U.S. cotton export weekly report released on Thursday showed that U.S. cotton signings last week were quite eye-catching. The contracted volume this year reached 88,700 tons, a month-on-month increase of 43% and an average increase of 55% from the previous four weeks. Asian countries have made good purchases, and China continues to be stable. import. At the same time, contract signings for the next year will also maintain a rapid growth momentum, and US cotton shipments will remain stable month-on-month.
On the 27th, ICE cotton futures closed slightly lower, and the rise in the US dollar overshadowed the positive impact of the weekly US cotton export report. The U.S. dollar index hit a new high as the Federal Reserve changed its stance on easing monetary policy, and traders also adopted risk-off strategies amid the Ukraine crisis.
Data from the U.S. Department of Commerce shows that U.S. GDP grew by 6.9% in the fourth quarter of 2021, much higher than market expectations of 5.5%. Consumer spending and business spending were the biggest driving forces, pushing U.S. economic growth to the highest level since 1984. At the same time, the number of initial jobless claims in the United States in December was still as high as 260,000, and durable goods orders were indeed the lowest since April 2020.
Analysts said that despite the recent decline in cotton prices, U.S. cotton demand remains good, so ICE futures should have good support at 118 cents. In addition, the market is also measuring the U.S. cotton planting area this year. Dry weather in most cotton-producing areas in the United States, tight ending stocks and geopolitical issues are now the focus of the market.
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