Since June 18, ICE cotton futures have oscillated and rebounded. The main contracts have successively exceeded 85 cents/pound, 86 cents/pound, etc., and the intraday high on June 23 “checked in” at 87 cents/pound. Judging from the market sentiment and spot market performance, ICE may continue to oscillate higher, testing 88-90 cents/pound. However, as the rebound momentum gradually weakens and bulls close their positions profitably, both bulls and shorts are expected to still trade at 85 cents/lb. The -90 cents/pound box is consolidating, looking for opportunities and directions, and does not have the conditions for a sharp rise or fall.
The factors supporting the rebound of ICE in recent days can be summarized as follows: First, the U.S. dollar index has fallen for several consecutive trading days, which helps commodity futures stabilize and rebound; second, As tropical storms land, heat waves occur repeatedly in the western cotton areas of the United States, and rainfall continues in the eastern cotton areas. Investors are increasingly worried about the unit and total output of US cotton in 2021/22; third, the 700,000-ton sliding tax quota is about to be issued. Boosting cotton imports; fourth, bulk commodities have come back to life in recent days, with the black series rebounding in retaliation, and corn, soybeans and other agricultural products also rose in response.
However, the market still needs to be cautious as ICE futures continue to attack 90 cents.
First, the Federal Reserve recently raised the interest rate on excess reserves from 0.1% to 0.15% and the overnight lending rate from zero to 0.05%. This is actually an interest rate increase. However, the types of interest rates are different;
Secondly, the impact of tropical storms in the southeastern United States has been amplified by institutions and speculators. The main cotton-producing areas of the United States are hit by tropical storms every year. , this year is no exception.
Thirdly, the global anti-epidemic situation is not optimistic. Soumya Swaminathan, chief scientist of the World Health Organization, said last week that the Delta strain is becoming the main new coronavirus strain circulating globally. More than 20% of the new coronavirus infections in the United States in the past two weeks were caused by Delta. The cumulative number of confirmed cases of COVID-19 in India has exceeded 30 million, and a third wave of the epidemic may be coming. Data from the European Center for Disease Control and Prevention (ECDC) show that the “Delta” mutant strain first discovered in India may account for 90% of all new COVID-19 cases in the EU in the next few months, and the “Delta” mutant strain is likely to Spread widely in summer. </p
