On July 24, ICE cotton futures continued to rise slightly. Market trading was mainly driven by higher grain prices in Chicago and continued dry and hot weather in western Texas. Based on recent high temperatures and dry weather, many market participants expect the rate of high-quality US cotton to decline further.
On Tuesday, the Federal Reserve will begin a two-day interest rate meeting. The market is expected to raise interest rates by 25 basis points this time. However, the market is more concerned about what the Fed’s concluding remarks after Wednesday’s meeting will say about the future policy path. guidance.
According to the latest CFTC position report, funds bought 3,300 lots as of last Tuesday, and the net long position increased to 5,400 lots. In terms of weather, temperatures in Texas will continue to be high and rainfall will continue to be low in the coming week. The probability of rainfall in the next 6-10 days is normal, and the probability of rainfall in the next 8-14 days is high. Nonetheless, the continued high temperatures will continue into early August, but the high temperatures will begin to move toward the east.
On the same day, ICE cotton futures closed slightly higher. The strength of Chicago grains and the dry and hot weather in the US cotton-producing areas continued to trigger speculative buying. The December contract hit the highest price since February 7.
On the same day, the U.S. dollar index closed higher as economic data showed the resilience of the U.S. economy. U.S. PMI market surveys showed that U.S. domestic business activity fell to a five-month low in July. Falling U.S. production input prices and slowing hiring showed that , the Fed may be making progress on important fronts in lowering inflation.
Foreign analysts believe that weather changes and China’s increased import demand may provide support for international cotton prices, and ICE cotton futures are expected to break through the long-term consolidation range. It should be noted that this year’s El Niño climate is causing food prices to rise, and cotton prices may fluctuate accordingly.