On February 25, cotton futures continued to surge to new highs in early trading following the rising tide of the commodity market. The day before yesterday, many industrial products, including copper and rubber, hit new highs. As time goes by, the market is very optimistic about the global economic recovery after the epidemic.
As of February 24, cotton futures have risen for nine consecutive trading days, hitting a new high in early trading on Thursday (25th). On February 25, ICE cotton futures experienced a major reversal in the second half of trading. Funds’ profits from closing positions at the end of the month caused cotton prices to plummet due to heavy volume. Since February, ICE futures have risen by a total of 12 cents, and this adjustment is inevitable. Of course, cotton also followed the overall selling of commodities by funds.
To be fair, the day’s weekly US cotton export report was also a factor that triggered the sell-off. Although U.S. cotton exports performed well during China’s Spring Festival holiday last week, with upland cotton contracted volume rising to 56,000 tons this year, and China’s signings continued, U.S. cotton shipments fell for the second consecutive week. As the year enters the second half, the market’s focus begins to shift from signings to shipments. If U.S. cotton shipments cannot keep up, there is no basis for U.S. cotton inventories to continue to decline.
From the perspective of downstream demand, the sharp rise in international cotton prices last week coincided with the Chinese New Year holiday. The overall performance of the international spot market was dull. After the holiday, textile mills were cautious in the face of the sharp rise in floral yarn prices, and later procurement demand Whether it can be released as scheduled remains to be seen. However, the sharp correction in cotton prices has also given textile mills the opportunity to price. It is expected that the market may need to dip lower in the short term to find support. Returning to the previous day’s high and reaching new highs still require more substantial benefits. </p
