On April 6, early oversold conditions and the stabilization of technical graphics triggered a lot of speculative buying, and ICE cotton futures surged sharply during the session. On the same day, ICE cotton futures closed sharply higher, again opposite to Monday’s trend. Unlike the previous day’s trading, cotton prices rose sharply on Tuesday and then held on to gains.
In recent days, with the massive selling by fund bulls, the market has entered an oversold situation, and the vacuum caused by the previous high prices has been alleviated. Judging from the latest position report, the fund sold 5,056 net lots last week, and the net long position dropped to 54,135 lots, which is much lower than the previous high of nearly 80,000 lots. Therefore, some traders began to re-enter the market to do long positions.
The first US cotton planting progress report this year shows that as of April 4, the US cotton planting progress is 6%, a decrease of 1 percentage point year-on-year. At present, western Texas in the United States is still dry, but rainfall in the next two weeks may be higher than normal. The delta region has more rain, which is slightly detrimental to cotton, corn and early-sown soybeans. The weather in the southeast is more suitable for the growth of early-sowing fields. , the central, western and southwestern plains will remain dry for the next ten days, and soil water shortages in non-irrigated fields will worsen.
Currently, the market is waiting for this week’s weekly US cotton export report. Judging from the situation last week, China canceled many contracts, but the US cotton sales progress has reached 102%, and it is an indisputable fact that US cotton inventories are tight. Regarding this Friday’s USDA monthly report, the market expects that U.S. cotton exports will continue to increase and U.S. cotton ending stocks will continue to decline. Analysts believe that the tight U.S. cotton supply in the later part of the year should provide strong support for the May contract and the July contract, while the Xinhua December contract should have great upside potential in the later period, and the current price is obviously underestimated.
The U.S. Futures Brokerage Company stated that there was a small amount of speculative buying in the market, some export business and some cotton spinning mill price transactions. At the same time, U.S. bond yields fell from highs, putting pressure on the dollar. An analyst said that cotton prices will rebound in the near future, but the range may be within 5 cents, because concerns about export cancellations may prevent traders from purchasing cotton in large quantities. </p
