On April 13, ICE cotton futures reversed the previous day’s decline. The decline in the U.S. dollar index, the strengthening of the grain market, and the continued drought in Texas helped cotton prices rebound sharply.
According to reports, the U.S. Consumer Price Index (CPI) rose the most in more than eight and a half years in March as vaccination rollout and massive fiscal stimulus unleashed pent-up demand. , kicking off what most economists expected to be a short period of rising inflation. The dollar fell to a three-week low after the data was released.
Rogers Varner, president of Varner Brokerage, said that because demand is still good, the market has bottomed out. Cotton futures will try to move higher. At the same time, rainfall in West Texas has limited impact on cotton. More rainfall is needed in this area to sow cotton, and drier weather in the Rio Grande Valley in South Texas may cause a tight market before summer.
As of April 11, the new cotton planting progress in the United States is 8%, mainly in the southwest region, while the southeast region has not yet started. The weather forecast shows that there will be very little rainfall in western Texas in the next five days, and the highest probability of precipitation is on Wednesday and Thursday this week, reaching 50%. Rainfall will then decrease significantly, with rainfall amounts below normal for the next 8-14 days.
In the short term, tight supply in the later part of this year will still provide sufficient support for the market. Currently, US cotton exports have completed 104%. If exports maintain rapid growth in the later period, US cotton export forecasts may Will continue to increase to 16 million packages. As for the supply and demand situation next year, it will be reflected in the USDA’s May forecast.
Overall, the current weather, supply and demand, epidemic, US dollar and political factors are complex. The market is under the combined influence of the two forces of the new and old years. The July contract has begun to lead the recent market. , and the new December contract will also play a starring role soon. </p
