On September 21, cotton futures recovered from the sharp drop the day before, and prices rebounded strongly. Earlier, selling in external markets caused cotton futures to follow suit and plunge.
The latest seedling situation report shows that as of September 19, the new cotton harvest in the United States has been completed by 9%, which is the same as the average for the same period in the past ten years. The harvest in Texas has been completed by 19%, which is the same as last year. It was flat and above the 10-year average of 15%. The excellent and excellent rate of new US cotton flowers was 64%, which was unchanged from the previous week. The weather forecast shows that there will be moderate to heavy rainfall in the Delta and Southeast regions of the United States in the next 1-5 days, drought will remain in Texas, and there will be less rainfall in most cotton-producing areas in the next 6-10 days and 8-14 days.
On September 21, driven by the rebound in the US stock market, ICE cotton futures rose back to above 90 cents. Traders are paying close attention to the outcome of the Federal Reserve meeting, which will discuss reducing the scale of bond purchases, that is, gradually withdrawing economic stimulus. September is usually a period of downturn for the stock market, and it has also fallen deeply in October. The trend of the US dollar will have an important impact on the stock market and commodities.
As new cotton from the northern hemisphere gradually comes on the market, countries are becoming more cautious in purchasing, making it very difficult for cotton prices to continue to rise to new highs. A large supply of new cotton from the United States and China is about to form, and the peak season situation of China’s textile industry is not ideal. Yarn inventories have begun to accumulate, and cotton prices have weakened. The volume of new cotton on the market in Pakistan has increased year-on-year, and domestic cotton prices have also fallen from highs.
After Monday’s sharp decline, ICE futures positions are still very high, and speculative long positions are still high. If China’s economic growth slows down, U.S. stocks and commodities are likely to correct further, triggering a massive liquidation of speculative long positions. As the launch of new cotton in 2021 begins, the number of commercial sales will also increase significantly. </p
