On May 10, ICE cotton futures opened a new week of trading with a decline, with traders paying attention to new changes in the weather in the United States. Forecasts show that it will rain again in western Texas this week, and it will rain again in the next 6-10 days, and the rainfall will further intensify in the next 8-14 days.
In addition, the weakness in cotton prices was also affected by Chicago grains. Corn, soybeans and wheat all experienced double-digit declines due to improved weather in the producing areas and serious overbought conditions technically. Judging from the latest CFTC position report, funds sold a net 450 lots last week, and the net long position dropped slightly, which gave cotton bulls a certain psychological blow.
At present, the drought in western Texas is still dry, while the delta area is too wet, the temperature in the southeast is low, and the soil conditions are not ideal. It is expected that US cotton planting will be further delayed this week.
The latest US cotton production report shows that new cotton planting in the United States accelerated significantly last week, reaching 25%, but the year-on-year lag has expanded to 5 percentage points, and Texas planting is still very slow. Currently, excessively wet soil in the U.S. Delta region has delayed sowing, and the recent surge in corn prices will also seize more cotton acreage.
The rest of the week will focus on the USDA supply and demand forecast and the US cotton export weekly report. Traders are paying attention to whether rising grain prices will lead to further reductions in U.S. cotton area, and expect U.S. cotton exports to increase and ending stocks to continue to decline. If so, cotton prices will have greater momentum to rise. At the same time, U.S. cotton export signing and shipment also have an important impact on market psychology. </p
