Last week, the USDA Outlook Forum significantly increased global cotton consumption and total production in 2021/22, while also significantly reducing global cotton ending stocks. Among them, it once again increased the demand for cotton from major textile countries such as China and India. This has a negative impact on ICE cotton futures. The main contract once again stood at 91 cents/pound, which fueled the situation.
Recently, the macroeconomic atmosphere has been favorable to the international capital market, and the Biden administration’s US$1.9 trillion economic stimulus plan will be launched ahead of schedule. At the same time, overall vaccination in Europe and the United States is rapid, coupled with the continuation of loose monetary policies by the Federal Reserve, the European Central Bank and other major economies in 2021, inflationary pressures continue to be transmitted to the stock market and commodity futures market. The external good news is that ICE has exceeded 91 cents/pound. key.
Several foreign businessmen and large cotton importing companies believe that currently, whether from the perspective of market sentiment, technology, external economics, or policy, there is a high probability that ICE will test 95 cents/pound, and it is not ruled out that the oscillation range will move up to 95 cents. -100 cents/pound possible.
According to CFTC statistics, as of February 12, 2021, there were 73,780 2020/21 ON-CAll unpriced contracts on the ICE futures market, a significant decrease of 4,336 contracts from February 5. The buyer passively priced the goods at a high price to avoid The operation of amplifying losses is more obvious. Since early February, the ICE futures long ratio has increased from 25.68% to 26.68%, and then to 27.78%. The ON-CALL contract is facing increasing price pressure.
A textile company in Shandong said that it regretted missing the opportunity to purchase at a price of 77-85 cents/pound. However, the increase in ICE from 85 cents/pound to more than 91 cents/pound occurred during the Spring Festival holiday and the increase was rapid. Basically, Without giving a chance to price, the company said that once the main ICE price exceeds 95 cents/pound, it may deal with it in a variety of ways such as negotiating buybacks with sellers, partial performance or even breach of contract.
As the main force of ICE stands at 90 cents/pound and moves towards the third target of 95 cents/pound, the differences among international cotton merchants, investment institutions, and buyers (including cotton textile mills) have increased, and the shock chamber has Whether the price can be moved up to 95-100 cents/pound has become the focus of debate and gaming. </p
