On April 26, ICE cotton futures continued to decline in early trading despite the strength of the external grain market. Technical overbought triggered some selling. In addition, rainfall occurred in some areas of Texas, and prices subsequently fell.
The latest CFTC position report shows that funds bought a net 1,806 lots of cotton futures last week, with the net long rate reaching 51,892 lots. Although the data only ends on April 20, it is still very directional.
On the same day, ICE cotton futures closed slightly higher, which was smaller than the previous few days. Traders were somewhat on the sidelines. The limit of the corn contract in recent months failed to drive cotton prices. Soaring, the July cotton futures contract only rose to its highest level since March 3. However, the NOAA drought warning shows that there will be less rainfall in western Texas in the next 6-10 days and 8-14 days, and the drought will further develop. Traders continue to track dry weather conditions in Texas, where cotton farmers in Lubbock report it is now sunny, windy and super dry.
The market is also paying attention to the Federal Reserve’s meeting. Powell is likely to reiterate that the Federal Reserve’s monetary policy will remain highly adaptable to the U.S. economy and will not consider the impact of short-term inflation. In addition, the market is paying attention to this Thursday’s weekly US cotton export report. USDA currently estimates that the ending inventory of U.S. cotton will be 4 million bales. Once there is another large order of U.S. cotton, the ending inventory of U.S. cotton will undoubtedly decrease further. </p
