On December 3, ICE cotton futures moved higher driven by speculative buying and bargain hunting. Over the past week, the new coronavirus mutant strain “Omicron” has shocked the entire financial and energy markets, putting huge pressure on cotton and grains. Panic has caused cotton prices to fall by about 13 cents, or 12%. However, As of December 3, the market sell-off began to ease and prices began to stabilize.
The latest data from the U.S. Department of Labor showed that U.S. non-farm employment increased by only 210,000 in November, far lower than market expectations of 550,000, but the unemployment rate dropped to 4.2%.
On December 3, after falling for five consecutive trading days, cotton prices finally stabilized and closed slightly higher. The bargain hunting orders of textile mills and the rebound of bulk commodities provided support for the market. Analysts said that textile mills took advantage of the drop in cotton prices this week to increase purchases, curbing the decline in cotton prices, while the overall stabilization and recovery of bulk commodities also contributed to the recovery of cotton prices.
So far, the cumulative export volume of U.S. upland cotton this year has reached 9.345 million bales. Although it is lower than the same period last year, it is higher than the average of the same period in the past five years, completing 63.8% of the USDA export forecast, and the average of the same period in the past five years is 65.0%.
It is gratifying to see a significant increase in the number of U.S. cotton export contracts signed last week, but the decline in U.S. cotton shipments still makes it difficult for the market to let go. With “Omicron” further threatening the global supply chain, port logistics and shipping problems may be difficult to resolve in the short term. The longer it takes, the more detrimental it will be to U.S. cotton exports. As time goes by, the time window left for the March contract to recover and rise will gradually close.
</p
