Since March 26, the main contract of ICE cotton futures has continued to consolidate within the 77-81 cents/pound box. Both bulls and shorts are waiting for direction guidance. Although the market once opened the 80 cents/pound mark again on Tuesday, (High point 80.88 cents/pound), but funds and bulls still lacked the confidence and confidence to push prices higher, and failed to close above 80 cents/pound in late trading. In the short term, the long and short forces will still stalemate and compete at the key point of 80 cents/pound. 80 cents/pound is likely to become the “watershed” for ICE’s disk price in April/May.
Industry analysts believe that ICE futures holding steady at 80 cents is mainly supported by the following four points:
First, the cotton region in the western United States The high temperature has set a new record, Texas continues to be in drought, while the southeast and central-south cotton regions have experienced cooling, which is unfavorable for cotton sowing in 2021, and funds have conditions for speculation; second, the International Monetary Fund predicts that the global economic growth rate in 2021 will be 6%, an increase of 0.5 percentage points from the estimate in January this year, and also raised the global economic growth forecast for 2022 by 0.2 percentage points to 4.4%. Global stock markets and commodity futures markets were boosted; third, the United States released strong employment and service industry data, the dollar weakened, and the three major U.S. stock index futures performed strongly; fourth, markets and institutions generally believe that the upcoming USDA monthly report will not only continue The U.S. cotton export volume for 2020/21 is raised, and global cotton consumption is expected to continue to grow, while U.S. ending stocks this year have declined again.
Some foreign businessmen and cotton trading companies believe that ICE still lacks effective and strong support and guidance, and does not have the power to rebound or even reverse. The first target of the main contract is one week. The current high is 81.52 cents/pound, and the second target is 85 cents/pound. Although the rebound is still constrained by many factors such as the resurgence of the new crown epidemic in Europe and the United States, the unclear or even bearish direction of China-U.S.-China relations, and the expansion of risks of intensified global regional conflicts, the rebound will encounter a “limit bar”, but the center of gravity of the market is expected to move up to 80-85 cents/pound. In addition to the recent speculation on the weather and sown area in the main cotton-producing areas of the United States, the U.S. 1.9 trillion economic bailout plan and the 2 trillion U.S. dollar infrastructure plan will be launched successively; coupled with climate factors, corn The reduction of exports by exporting countries and the vigorous promotion of new energy policies by countries such as the United States and Europe have stimulated international food prices to rise for nine consecutive months. Therefore, the “wind direction” of ICE has changed, and “more rises and less falls” may become a recent feature. </p
