During the Spring Festival, crude oil futures and agricultural products rose strongly (from January 28 to February 4, the main force of U.S. crude oil rose by 5.37%, the main force of U.S. soybeans rose by 5.79%, the main force of U.S. soybean meal rose by 7.92%), and the main force of ICE cotton futures rose again. Hitting an 11-year high of 129.37 cents/pound, the intention of funds to push prices higher and squeeze positions is still obvious.
Some foreign investors and cotton trading companies have judged that as institutions continue to bullish the commodity market in the first quarter, U.S. cotton contract sales and shipments will speed up in 2021/22, and the main ICE contract will briefly consolidate and accumulate strength at 125-130 cents/pound. It will still test the strong resistance level of 130 cents/pound in the future. Therefore, the ON-CALL price plate will be tighter and tighter in the short term, and it may not be uncommon for delays in performance and breach of contract.
According to feedback from cotton traders in Qingdao, Zhangjiagang and other places, cotton companies’ shipping, bonded, and customs clearance cotton quotations were relatively scarce on February 6 and 7. On the one hand, most domestic cotton textile mills are in the stage of resuming work and production, and inquiries about cotton and other raw materials are Price, purchase and sales orders have not yet been effectively launched; on the other hand, ICE cotton futures have fluctuated widely since January 28, and cotton companies are more cautious in their external quotations, and most of them adopt a wait-and-see approach. Some traders’ quotations of Brazilian cotton for far-month shipping dates are low or the adjustment range is relatively small (compared with late January), which has attracted the attention of middlemen and cotton spinning mills and actual purchase orders. For example, on February 7, a company in Zhangjiagang reported July/August The shipping date for Brazilian cotton M 1-1/8 (strong 28/29GPT) in 2021/22 is only 115-116 cents/pound, and 800 tons of pre-sale resources are quickly sold out.
According to industry analysis, with the release of 894,000 tons of 1% tariff cotton import quotas in place and the cotton market’s expectations for supplementary increases in bulk commodities, ICE, etc. in the first half of 2022, coupled with the opening of the “window” for textile companies’ raw material replenishment after the holiday, Buyers’ contracts for cargo and spot Brazilian cotton/US cotton are expected to continue to increase.
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