Although Cotton Prices Have Fallen Into "Bear Like" Market, There Is Still A Certain Downward Trend.

Market falls are always faster and more violent than expected.

From mid May to the present ICE futures contract in July is a bit like a two stage slide. After a quick fall from the high point, it is slightly buffered and then continues to accelerate downward with inertia. Now it is seen that 60 cents or even 50 cents.

At the moment, the new year's high expectations for the northern hemisphere are firmly in control of the market. If weather is normal, the final output of Mei cotton may exceed the current forecast.

New cotton production in China, India and Pakistan is also very good.

The recent drop in cotton prices has triggered a lot of selling.

As of mid June, ICE futures had fallen below the 200 day moving average, the single day drop in June 15th was more than 2%, and the December contract fell easily by 70 cents.

At the same time, the fund is being liquidated at the rate of nearly ten thousand hands per week.

According to the present situation, the market still has certain drop space.

Often, when the market is extremely empty, it means new opportunities.

Some foreign investment institutions believe that although the trend of cotton prices is bearish, at this stage, the market is digesting the bad anticipation of the new year's high yield, and there may be new opportunities for later operation.

According to the analysis of a foreign institution, although the cotton planting area in the United States has increased significantly this year, due to the outstanding performance of US cotton exports in the past few years, the expected increase in US cotton stocks in the next year may not be realized.

Considering that the US Department of agriculture forecast June to reduce the final inventory in the US 2016/17 by 600 thousand packs, 2017/18 year

The growth of supply may not reach the previous forecast.

According to the latest news, the United States

The actual situation of growth is not as optimistic as USDA data.

According to feedback from cotton growers in the United States, a considerable number of dryland fields in the plateau have not been able to sow seeds before the insurance deadline. Drought has caused many unirrigated fields to grow unevenly, and it is difficult to grow at high temperatures.

The weather forecast shows that the high temperature in the Burke region of Texas has been at 38-39 degrees Celsius this week, and will reach more than 40 degrees over the weekend, and the dry and hot weather will last until at least the middle of next week.

Since June, the rainfall in the Burke area is less than 9 millimeters, which is 30 millimeters lower than the normal level.

The total rainfall since January is 148 millimetres, which is 48.5 millimeters lower than the normal level.

Not only that, USDA will also cut 500 thousand packages of US cotton exports in the next month. It seems too hasty. If the quality of new cotton is good this year, the US cotton exports in the late stage are likely to exceed the current forecast so as to effectively avoid the US cotton trade.

The rise.

It can be said that this sharp reduction has left room for USDA to increase US cotton exports later.

According to the analysis of foreign industry organizations, textile mills continue to purchase spot goods for immediate production in the past few weeks, raw material inventories have basically not increased, and there are still four months to go before the new flowers are listed in large quantities. It is expected that procurement demand will gradually release in the coming period, and once the new cotton market is delayed, the supply will become more intense.

In the face of sustained and stable demand in factories, the situation of global easing will gradually change.

At present, many funds are busy closing positions before delivery, and cotton prices are falling rapidly.

However, after the July contract deliveries are dispersed, the market will gradually reveal its true colors.

At that time, excessive cotton prices will be revised to a certain extent.

The deeper the fall, the greater the chance of late rebound.

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