Since late February, ICE cotton futures have experienced a wave of “roller coaster” market, the main May contract soared from 90.84 cents/pound to the highest intraday level of 103.80 cents/pound, a new high since September 2, 2022, in recent trading days and opened a diving pattern, bulls not only failed to hold the 100 cents/pound mark, And the 95 cents/pound pressure level also broke in an instant, and the increase in late February was basically reversed.

For the sharp rise and fall of ICE futures in half a month, cotton export enterprises, international cotton merchants, cotton mills feel some Meng circle, in the face of such fast-paced changes on the plate, most cotton companies said that there are “difficult quotes, slow shipments, contract execution is not smooth” and other problems. A trader in Huangdao said that since mid-to-late February, bonded cotton, spot and cargo “one price” has been greatly reduced, in order to prevent risks, can only take basis quotation, point price (including after point price) and other models of sales, but the US dollar resources are only sporadic transactions. Some cotton companies take advantage of the opportunity for ICE to rise sharply and Zheng cotton to follow up the weakness, slightly increase the RMB resource base, and the shipment is relatively better, but with ICE and Zheng cotton bottoming out, cotton textile companies and middlemen wath-and-see sentiment is heating up, replenishment efforts are weakened, the procurement cycle is extended, and only a small number of RMB basis resources are traded.

From the survey, due to the ups and downs of ICE futures, the continued increase in port bonded cotton stocks after the Spring Festival (several large cotton companies estimate that the total inventory in China’s main port or has been close to 550,000 tons), coupled with the significant reduction in the volatility of the RMB exchange rate in February (the RMB spot exchange rate to the US dollar fell from 7.1795 to 7.1930, a total decline of 135 points, Down over 0.18%), so the enthusiasm of cotton companies to hang orders and ship is relatively high, no longer cover the plate and hesitate to sell, not only the February/March shipment date 2023/24 Indian cotton cargo, spot offer increased significantly compared with the previous few months, In addition, the supply of “non-mainstream” cotton such as port bonded M 1-5/32 (strong 29GPT), Turkish cotton, Pakistani cotton, Mexican cotton, and African cotton is gradually increasing.