Last week (November 23-27), ice futures first rose and then fell before Thanksgiving, and then again took the plunge after the festival. Led by the news of the new crown vaccine, the US stock market and crude oil reappeared a wave of upward trend, which led to a good economy and cotton demand recovery expectations to bring strong support to cotton prices.
From the present point of view, although the epidemic situation is still worrying, good news from the international political and economic levels to a certain extent offset the negative impact. With the news of the vaccine coming one after another, the Dow Jones index of the United States stood at the 30000 mark for the first time. Under this encouragement, other markets have made positive response. At the same time, with the general election of all countries, the future of the United States has gradually settled.
According to the recent economic data analysis, cotton demand may start to increase. NRA expects holiday sales from November to December to grow 5.2% year-on-year, with online sales expected to grow 30%. In August, the number of consumers in shopping malls was only 54% of a year ago, but it has risen to 71% in October. At the same time, the purchasing managers' index of US manufacturing industry and service industry reached 57.7 and 56.7 respectively, which were the highest in recent five years and the highest in recent six years. Therefore, without the strict blockade, it is expected that the shopping desire of American consumers will recover.
Last week's U.S. cotton exports were gratifying, with a net contract of 80000 tons this year. The decline in the US dollar helped us cotton exports. In the next year, 8700 tons of cotton were signed, which were basically purchased by China. Moreover, the contracted volume of Pima cotton increased significantly. Adding up the two years, the number of contracts signed last week was three times that of the previous week, twice the average required to complete the USDA forecast, and 80% higher than the average of the same period in recent four years.
Foreign analysts believe that if it was not for last week's Thanksgiving profit, ice futures should have risen to a higher level. Judging from the current price trend, the March contract has strong support at 71.50-72.50 cents. If it breaks through 74 cents, the next step will be 80 cents.