According to CFTC statistics, since the beginning of April, as the main forces of ICE cotton futures have continued to oscillate and rebound from 78.97 cents/pound, ON-CALL point price contracts have dropped from 40,600 to 38,400 to 36,300 until the end of last week. 34,200 pieces, but as the July contract approaches 90 cents/pound, buyers’ willingness to price-point purchases has dropped significantly. At the end of April, some ON-CALL contracts faced difficulty in price-pointing, and buyers and sellers negotiated to postpone price-pointing or cancel the contract. The probability is higher.
Recently, the net long ratio of the ICE Cotton Futures Fund has rebounded from 21.46% to 23.47%. The bullish sentiment among funds and traders has not subsided, but as most of Texas The cotton area has received rainfall, the drought has been alleviated to a certain extent, and the southeastern cotton area has received more rain. Goldman Sachs and other institutions predict that U.S. economic growth will reach its peak in the next two months and will “moderately slow down” in the third quarter, and will continue to grow in the future. With several quarters of continued deceleration and other effects, ICE speculative bulls may take profits and flee above 90 cents/pound, thereby limiting and suppressing the height of ICE’s current rebound.
According to feedback from several international cotton merchants and trading companies, cotton futures have risen in tandem with internal and external markets recently, and most exporters and traders have not made any basis differences for foreign cotton, whether in US dollars or in RMB. Therefore, cotton textile mills and middlemen are much more active in inquiring and picking up goods at ports and spot “fixed price” U.S. cotton, Brazilian cotton, and Indian cotton than in early and mid-April, and the RMB price is generally 200-300 yuan/ton. of recovery.
Judging from the survey, due to intensified concerns about the out-of-control COVID-19 epidemic in India, Brazil, Japan, Europe and the United States, and the huge number of cases that Chinese cotton textile companies received in March/April, Medium and long-term orders are lower than expected and relations between China, the United States, and China are still very unclear. After the main ICE contract exceeded 85 cents/pound and 88 cents/pound, cotton companies have increased their cotton quotations (including US dollars, RMB quotation), sales intensity, and the sharp appreciation of the RMB against the US dollar in the past week or so has created better conditions for Chinese companies to sign contracts and purchase medium and high-quality US cotton, Brazilian cotton, Indian cotton, etc. </p
