Since early August, ICE cotton futures have oscillated and rebounded at low levels. Although it looks like “four consecutive positives” from the market, the main contract is still accumulating and consolidating in a narrow box of 88-90 cents/lb. Although the bulls have occupied Advantage, but the weak balance and stalemate situation is difficult to break for a while.
A cotton trading company in Jiangsu stated that due to the rapid spread of mutant strains such as “Delta” around the world, the comprehensive upgrade of epidemic prevention and control in most countries, and the rebound of bulk commodities such as crude oil and agricultural products, Under the influence of negative factors such as the repeated/repeated rise in sea freight rates, the serious shortage of containers, the low signing rate of U.S. cotton in the USDA weekly report, and the reluctance of Chinese buyers to make a move, ICE has pushed up The speed has slowed down and the power has weakened. However, regardless of market sentiment, technical aspects, and fundamentals, ICE is still in a rebound and upward channel. 90 cents/pound may be just the “shoulder” of this round of rebound that started in late March 2021. (from 75.34 cents/pound to 91 cents/pound), not the top.
Currently, the weather and temperature in the main US cotton-producing areas in 2021/22 are not ideal. In the early stage, the cotton areas in western and northwestern Texas suffered from long-term high temperature and drought; in mid-to-late July, the cotton areas in Texas and southeastern Texas experienced continuous heavy rains, causing floods; in the next 6-10 days and 8-14 days, Texas and the Delta in the United States will The temperatures are low but the rainfall is high in the southeastern region, which is not conducive to cotton development and growth
At the same time, the global economy, trade, and transportation are struggling to recover. With the improvement of vaccination rate and the benefits brought by loose monetary policy, consumer demand for cotton textiles, clothing and other countries in Europe and the United States has accelerated. In addition, the recurrence of the epidemic in some Southeast Asian countries such as Vietnam and Indonesia has led to a decline in textile and clothing production and supply capacity. Therefore, ICE Easy to rise but hard to fall.
As summer comes to an end and the “Christmas economy” at the end of the year is approaching, demand for textile and clothing is expected to grow strongly. Judging from the survey, orders for the “Double Festival” (Christmas and Easter) have begun to arrive in August, and are expected to reach a peak in September/October. Textile and clothing companies in various countries are working overtime to receive/arrange orders. Official statistics show that in June, the United States continued to buy 236.7 billion US dollars of goods. The growth in its shipping demand has led to an increase in sea freight. With the arrival of the “Christmas economy”, it is not only difficult to get a ticket for containers in the European and American directions. ” and shipping costs continue to climb. </p
