On December 8, ICE cotton futures fell during the session, and some traders adjusted their positions before the release of the USDA report. On Thursday, the U.S. Department of Agriculture will release its weekly U.S. cotton export report and December supply and demand forecast.
Judging from last week’s report, China is still the main buyer of US cotton, and the signing situation is quite good, but US cotton shipments are still disappointing. Currently, the global logistics crisis is a very serious obstacle to the US cotton industry. Regarding the USDA supply and demand forecast, the market expects an increase in U.S. cotton ending stocks, which is also the result of the global supply chain crisis, but at the same time global stocks are expected to decline, which is the result of declining production in India and strong textile demand in China.
After Omicron’s concerns eased, commodities rebounded to a certain extent and market sentiment gradually stabilized, but market concerns about the trend of the U.S. dollar persisted. The Federal Reserve’s monthly interest rate meeting next week will attract much attention. The Federal Reserve’s Taper plan and the steps to raise interest rates will have a major impact on the trend of the US dollar.
On December 8, ICE cotton futures closed with mixed results. The current year’s contract closed up, but the next year’s contract closed down. Overall, market trading was light that day as traders continued to await relevant reports on Thursday.
Jon Marcus, president of Chicago brokerage Lakefront Futures and Options, said that after cotton prices fell sharply last week, the market seemed to be consolidating and awaiting the USDA report. Cotton prices fell by more than 6% last week, as concerns about new variants of the coronavirus cast a shadow on the outlook for cotton demand. Marcus said Chinese demand for U.S. cotton is unlikely to slow.
Analysts said that given that ICE is still above the 50% correction after this pullback, the technical outlook still maintains an upward trend. Before the macroeconomic and external market reversal, this correction is still a correction in the long-term rise.
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