At the end of December 2021, the main contract of ICE cotton futures once again exceeded 115 cents/pound (the intraday high of 115.33 cents/pound, getting closer and closer to the high of 118.50 cents/pound in more than ten years), but failed in late trading Hold on, the long and short sides repeatedly compete and stalemate in the narrow range of 112-115 cents/pound.
Due to the continuous upward breakthroughs of ICE, the enthusiasm of buyers including China, Vietnam, Pakistan, Indonesia, Turkey, etc. for the inquiry/signing of US cotton in 2021/22 continues to weaken. In addition, the relatively strong performance of US economic data has led to the continuous strengthening of the US dollar. Therefore, ICE’s rebound has been suppressed and restricted. Some cotton traders believe that bulls and funds are bullish in the short term and have a strong sentiment to pull up. The probability of the market reaching 115 cents/pound is relatively high. Whether it can hit a new high in ten years remains to be seen. Traders are short-selling and chasing shorts. cautious.
According to feedback from cotton companies in Zhangjiagang, Qingdao Port and other places, as of the end of December, the number of U.S. cotton stocks cleared for port customs clearance in 2019/20 and 2020/21 has been very small, and it is concentrated in the hands of a few large and medium-sized cotton traders. “Small goods, high prices The phenomenon of “reluctance to sell” has become more and more prominent. Not only is the price quoted for Brazilian cotton of the same quality and grade no longer inverted, it is also one to two “positions” higher than that of Brazilian cotton. For example, on January 2-3, the fixed price of Qingdao Hong Kong US cotton 31-3/31-4 36/37 (strong 30-32GPT) reached 23400-23600 yuan/ton (net weight settlement), while Brazilian cotton M 1-1/8 (or M 1-5/32) The fixed price is about 23,000-23,400 yuan/ton.
It is worth noting that the quotations of bonded and shipped Brazilian cotton are still inverted with those of US cotton, and their competitiveness is at a disadvantage. For example, some cotton merchants’ March/May 2022 shipping schedule for U.S. cotton EMOT/MOT 31-3/31-4 36/37 basis is concentrated at 15-17 cents/pound (ICE2203 + basis), while the same shipping schedule for Brazilian cotton M The basis for 1-5/32 (strong 28/29GPT) is as high as 16-18.5 cents/pound. Therefore, since mid-to-late December, U.S. cotton sales have shown a pattern of “weak port spot goods and strong distant month cargoes”.
In addition, as usual, 894,000 tons of cotton import quotas within the 1% tariff will be issued around mid-January in 2022, which has attracted great attention from international cotton merchants, traders, cotton textile mills, etc. Some cotton-related companies have begun to increase the number of foreign cotton cargoes. Inquiry intensity.
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