According to CFTC statistics, as of May 21, 2021, there were 19,504 ICE cotton futures ON-CALL unpriced contracts, a significant decrease of 13,814 contracts from May 7, a decrease of 41.46%. In just two weeks, The number of ON-CALL contracts has dropped by almost 40%, which is not a big deal.
An international cotton merchant said that in the past half month, the main ICE contract has exceeded 90 cents/pound, 85 cents/pound, and 82 cents/pound (intraday low 81.50 cents/pound), a large number of ON-CALL price orders were traded. On the one hand, cotton spinning mills and traders in China, Vietnam, Pakistan, Indonesia and other countries replenished their stocks in time with the sharp decline of ICE; on the other hand, 100% Hedging cotton companies accelerated their arbitrage operations (the basis was stable and slightly increased). They not only recovered the payment in advance, but also increased their net profits. ICE fell back to the 80-85 cents/pound range, creating a win-win situation for cotton hedging merchants and cotton users.
Several cotton spinning mills in Jiangsu, Shandong and other places said that the diving range of ICE in mid-May was somewhat beyond expectations, with prices of 85 cents/lb and 82 cents/lb being instantly hit. Wear, resulting in the rapid transaction of ON-CALL contracts, focusing on US cotton, Brazilian cotton and a certain amount of West African cotton in 2020/21; considering that there are still variables whether the epidemic can be effectively controlled in the second half of 2021, and the continuous rainfall in the main cotton-producing areas of the United States And commodities have fallen under the multi-pronged pressure of continued attention, propaganda, and increased supervision at the national level. Therefore, some Chinese buyers are expected to further lower the price to 78-80 cents/pound of the main ICE contract.
However, judging from the feedback from international cotton merchants and traders, in addition to ON-CALL contracts and customs-cleared foreign cotton transactions at ports have been relatively active recently, regardless of the June/October shipping schedule Inquiries and signings of US cotton, Brazilian cotton, Australian cotton, Indian cotton or foreign cotton in the port bonded warehouse are not ideal or even a little light. According to CFTC statistics, as of May 25, 2021, the long ratio of ICE cotton futures fell back to 15.11%, a sharp drop of more than 10% from early May. The confidence of funds and bulls has declined again and again. </p
