Global Stock Market Slump Leads To Profit Making

Intercontinental Exchange (ICE) index

Monday fell to its lowest level in a week and a half, recording the largest one-day drop in more than a year, triggered by a sell-off in the global stock market and commodity markets as a result of the collapse of China's stock market.

Traders said this prompted investors who needed capital to pay back the margin to make profits on profitable investments, including selling cotton futures.

According to the latest data, the price of cotton futures has risen sharply in the past two weeks, because the US Department of agriculture's production forecast is very profitable, making it profitable for speculators who cut off a large number of net long positions on Tuesday.

China

Large scale shocks are also bad for the cotton market because China is the largest cotton consumer in the world.

Traders said that although today's trading is mainly driven by peripheral market trends, expectations for weakening demand in China also weigh on the market.

ICE12 cotton fell 2.86 cents, or 4.3%, at 64.05 cents a pound, hitting 63.93 cents in August 12th.

Today's decline is the largest since May 2014.

futures

Total turnover increased by 28753 to 44458 hands.

Data showed that the number of open positions increased by 129 to 196660 hands on Friday.

The US dollar index fell 1.41%, and the core commodity CRB index fell 2.68%.

In the past week, speculators increased their net cotton positions from 19341 to 41986.