According to feedback from some international cotton merchants and cotton exporters, due to the recent sharp rise in international prices of wheat, corn, soybeans and other food crops, the trend of ICE cotton futures deviates from the trend of commodities such as crude oil. The weather performance in major producing areas such as the United States and India since February Affected by many factors such as poor performance, the growth rate of cotton planting area in the northern hemisphere in 2022 may be lower than previous expectations of various institutions and cotton-related companies.
A foreign businessman said that since March, the inversion range between ICE’s far-month disk price and near-month disk price has gradually narrowed, and US cotton shipment inquiries and contract signings have rebounded in 2022/23 (the main buyers are Pakistan, Vietnam, Bangladesh, Indonesia, etc. , very few Chinese companies have signed contracts), indicating that institutions and speculators’ expectations that global cotton planting area and output will increase significantly in 2022, and that supply will exceed consumption, have significantly weakened, and the basis of each ICE contract has ushered in a reasonable adjustment.
Statistically speaking, on Monday, Chicago soft red winter wheat futures (SRW) for May delivery jumped 7% to $12.94 per bushel (wheat futures rose more than 40% last week, the largest weekly increase on record ); corn futures prices rose 3 cents to US$7.5725 per bushel, an increase of 0.4% (a cumulative increase of 9.6% in March and a cumulative increase of 27.6% so far in 2022); agricultural products such as rice, soybeans, and peanuts also continued to rise, so Not only has the proportion of farmers in the United States, India, Central Asia, West Africa and other places who intend to “convert cotton to grain” planting rapidly increase from January/February, but some basic farmers and cooperatives in Xinjiang are also increasingly enthusiastic about expanding grain planting area in 2022.
In addition, due to the low temperature in most of the United States so far, the western and southwestern cotton areas continue to suffer from drought, less precipitation, and poor soil moisture. Large-scale precipitation in the central-south and southeastern cotton areas has caused waterlogging. Therefore, it has a greater impact on spring sowing of cotton, and farming has been abandoned. rate may be higher than in previous years. Some foreign businessmen and institutions have judged that the year-on-year increase in U.S. cotton planting area this year may be significantly lower than the 13% predicted by the USDA; while insect infestations are raging in states such as Punjab and Haryana in northern India, and farmers are deeply troubled and have questions about whether to maintain or expand cotton production in 2022. The planting area is hesitant, but as the prices of grain and other crops rise sharply, the enthusiasm for “abandoning cotton and growing grain” has obviously recovered.
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