Although the Spring Festival holiday Chinese enterprises signed a significant slowdown in cargo/bonded cotton, USDA Outlook Forum forecast 2024 US cotton planting area and production increased significantly, February 2 to February 8 2023/24 US cotton swab export volume continued to decline sharply, the Federal Reserve 2024 interest rate cut by Powell “poured cold water”, However, the Spring Festival holiday ICE cotton futures continued to rise since the end of January, the main May contract not only strongly broke 90 cents/pound, and once moved the trading range to more than 95 cents/pound (the intraday high of 96.42 cents/pound, up 11.45 cents/pound from the end of January, half a month up 13.48%).

Some institutions, cotton-related enterprises, international cotton commercial “in one step” to describe the performance of the outer plate during the holidays. Industry analysis, in the past half a month, ICE a Yang line rose, mainly by the three major stock indexes in the United States continue to hit new highs, commodity futures continued to rebound and long funds accelerated entry into the market, ICE total holdings, index funds net multiple orders have increased significantly and other factors, cotton supply and demand fundamentals are more negative than positive.

From the survey point of view, in the past two days, Qingdao, Zhangjiagang and other cotton trading enterprises have resumed work, the port bonded cotton, spot and cargo gradually have quotes (US dollar resources), while RMB resources are rarely listed orders, quotes, on the one hand, there is only futures trading on February 19, for traders who choose to wait and see; Second, by the holiday ICE cotton futures rise, the entire cotton cotton textile industry chain is expected to rebound more sharply after the holiday Zheng cotton (the industry on the stock market after the holiday, commodity futures market brush bullish), cotton enterprises hold high sentiment is very strong, in the face of downstream cotton enterprises, middlemen and other customers inquiry, cotton traders mostly choose to silence, do not quote or cover the waiting.

From the point of view of some cotton merchants, the current Qingdao Port bonded Brazil cotton M 1-5/32 (strong 28/29/30GPT) net weight quotation has been raised to 103.89-104.89 cents/pound, the direct import cost under 1% tariff is about 18145-18318 yuan/ton, although the spot price increase is slightly lower than the main contract of ICE cotton futures. However, during the Spring Festival, the adjustment space of bonded cotton and cargo also reached 5-6 cents/pound.

Source: China Cotton Network