Market Observation: Global Economic Turbulence, Cotton Market Trend Is Not Strong

On October 22, after the surge the day before yesterday, the cotton market trend was somewhat recovered. At the peak of new cotton harvest, especially in the election year, traders were cautious, always put their bags in their pockets, and continued to identify the real trend of the market.

According to the latest report, 44% of America's new cotton harvest was completed last week, higher than the average of 38% in the same period of the past five years, and the new cotton excellent rate continued to rise to 37%, higher than the average of 34% in the same period of the past five years.

According to the latest forecast of Indian Cotton Association, Indian cotton production in 2024/25 will decline by more than 7% year on year due to excessive rainfall. The monsoon season in India lasts from June to September every year, but it has not yet completely ended this year. In October's supply and demand forecast, the US Department of Agriculture predicted that India's cotton production would decline by 7% year on year, and India would change from a net cotton exporter to a net cotton importer.

Dealers waited for this week's US cotton export weekly report. Last week, the contracted volume of US upland cotton reached 159800 bales, the highest level since August 29, but the shipment volume was only 57800 bales, the lowest in this year.

Up to now, the US new cotton harvest has been close to half way. Recently, the US dollar index has been growing stronger. Traders are considering which direction the cotton price will choose. Seen from the recent situation, the Dow Jones Index has shown a weak trend. The big voters in the United States have dominated the market. It is difficult to choose and judge the cotton market for a while.

On Tuesday, ICE cotton futures closed slightly lower, mainly because the fund adjusted its position. Since last Tuesday, the December contract has risen by 200 points, and the trading volume has significantly increased. Some analysts predict that the long and short orders of the fund's short positions may be roughly equivalent.

On the same day, international oil prices rose again, and traders were ignoring supply disruptions in the Middle East. Another negative factor is China's weak economy, but the People's Bank of China said it would take more economic stimulus measures and cut the preferential lending rate.

At present, the basic news of cotton is relatively calm, and the market is waiting for the direction of the macro and peripheral markets. From the technical graph, the low price has gradually risen in the past two months, and before the demand really opens up, the market may remain volatile.