On February 28, ICE cotton futures continued to fall sharply during the session, and the fierce military conflict between Russia and Ukraine continued to bring huge psychological pressure to the market. As Western countries imposed severe economic sanctions on Russia, the ruble interest rate soared to 20%, causing the rupee to depreciate sharply and putting the domestic economy under tremendous pressure. Moreover, once the Black Sea ports are closed, it will also affect India’s exports of cotton products to the region.
After a period of correction, the cotton market began to consolidate on Monday, expecting last week’s U.S. cotton export sales to drive a new round of gains. However, Russia’s tough stance made the market afraid to act rashly. If Russia and Ukraine fall into a protracted war and the West imposes long-term economic sanctions on Russia, this will make the already fragile global economy even more unbearable.
On that day, the U.S. Dow Jones Index once fell by more than 900 points, but eventually stabilized and recovered and closed 90 points higher. The ICE cotton futures May contract fluctuated sharply, and finally withstood the sell-off at the end of the month. It regained its lost ground in response to the delayed response to the U.S. cotton export weekly report last Friday. It closed slightly higher. The early decline was mainly due to the conflict between Russia and Ukraine that triggered market concerns about the contraction of the global economy.
According to the latest weekly U.S. cotton export report, U.S. cotton shipments hit a new annual high last week, which at least shows that the current supply chain crisis is easing. Coupled with the large increase in contract volume, reaching more than 100,000 tons, market sentiment has recovered. As of now, the US cotton underwriting volume has reached 87% of the average for the same period in the past five years.
On the same day, the U.S. dollar index closed higher. Although it fell from its high point, the Ukraine crisis also caused the Federal Reserve to face new problems in raising interest rates. It is also uncertain whether it will start raising interest rates as planned at the March meeting. With crude oil rising and Russia’s economy in recession, the Fed is likely to maintain current policy for a little longer.
</p
