On March 23, ICE cotton futures continued to fall, the U.S. dollar index continued to rise and the impact of Sino-US talks continued.
Currently, the third wave of the COVID-19 epidemic in Europe has led to renewed blockades in many countries, and the epidemic in the United States is also showing signs of rebounding. It is reported that Germany has extended the blockade period until April 18. On that day, crude oil futures fell by more than $4/barrel. Concerns about cotton demand and the bleak outlook for Sino-US relations continued to weigh on market sentiment. ICE futures closed sharply lower. The May contract fell for the fifth consecutive day, closing at its lowest level since February 1. Other markets besides grains also fell across the board.
Analysts said that factors such as the continued strength of the U.S. dollar, the third wave of the epidemic in Europe, tensions between China, the United States and China, and the United States’ preparation to raise taxes have made it difficult for the market to be optimistic about cotton demand. . The fundamental positive factors for this year’s ICE futures contract (declining ending stocks and increased exports) have been completely offset by the negative impact of the rising dollar and Sino-US relations.
U.S. industry analysts pointed out that the current third wave of the new crown epidemic in Europe has led to the postponement and cancellation of some orders, triggering market concerns about cotton demand, and some textile mills have lost interest in rising prices. gained confidence. According to foreign trade sources, European countries have gradually been canceling orders since mid-March, and some even do not require deposits.
For the trend of the U.S. dollar, traders are very concerned about the testimony of the U.S. Treasury Department and the Federal Reserve before Congress. There are currently several questions about the new coronavirus relief spending, how to pay for it, the infrastructure bill, and raising taxes, etc., all of which are closely related to the trend of the U.S. dollar.
In terms of weather, rainfall in Texas in the United States will be below normal levels in the next 6-10 days, but rainfall will increase in the dry areas of the southern part of the state in the next 8-14 days. Currently, parts of western Texas are experiencing extreme drought.
Currently, the market is waiting for Thursday’s weekly U.S. cotton export report to boost sentiment. However, last week’s U.S. cotton sales of 130,000 tons did not increase prices, and next week’s U.S. intended area It will be released soon. The recent market risks have become more and more serious. Fund bulls and funds have chosen to close their positions and withdraw from the sidelines. The short-term market will mainly be weak and downward. </p
