Many Factors Are Coming In One After Another. ICE Cotton Futures Are Rising Rapidly.

The ICE futures contract entered the overbought market after rising 500 points in May, and the USDA monthly report gave the market a breathing space.

At present, the bullish factors of the market include: China and the United States are about to reach an agreement, the US cotton export sales are increasing faster and the US cotton planting area is far lower than expected.

Last week, the Sino US negotiating team continued their close consultations by telephone conference. U.S. Treasury Secretary Mu chin said that the two sides had reached some agreement on the implementation mechanism. The specific implementation of the agreement is a very critical factor.

As of April 4th, the US 2018/19 cotton export contract volume has reached 94.6% of the USDA forecast, which is just the same as the average in the past five years. Therefore, if Sino US negotiations reach a consensus that China will import a lot of American cotton in the latter part of the year, the possibility of the US cotton export forecast will be increased, which is obvious to the stimulation of ICE futures price.

On 11-12 April, the ICE cotton futures got rid of the earlier USDA report, and the adjustment posture was stronger. The short-term bullish traders stimulated the traders to buy again. On the 12 night, the Chinese government announced that the additional 800 thousand tons sliding tariff cotton import quotas would once again give the market a "strong heart".

It is believed that although it will take some time to apply for quotas from the quotas and the real refund, this news undoubtedly confirms China's "thirst for hunger" import demand, which is likely to indicate that the export of US cotton products in the coming weeks, especially the shipment schedule, will obviously accelerate.

The above situation has become the three important bullish signal in the current market.

From the US agricultural Counsellor's recent forecast of the main cotton producing countries, cotton production in India, Brazil and Pakistan will increase significantly.

Although the delayed planting of American cotton has not yet occurred, the prediction is predicted, and the actual output depends on the weather.

In April 12th, the cotton futures of the ICE (Intercontinental Exchange) rose to a higher level. As the Chinese development and Reform Commission issued cotton import quotas, traders expected the demand to increase, and the weakening of the US dollar also supported cotton prices.

The cotton contract rose 1.13 cents or 1.5% in May, and the settlement price was 78.11 cents per pound, with an interval of 76.88-78.65 cents per pound.

In April 12th, the China Development and Reform Commission issued a notice on the relevant issues concerning the application of import tariff quotas for cotton tariff quotas in 2019, and issued a certain number of import quotas for the preferential tariff rates of cotton tariff quotas in 2019, 800 thousand tons, all of which are non state trading quotas, and the application time is from April 15 to 29, 2019.

Another factor that boosted cotton prices is the weakening of the US dollar.

The decline in the US dollar makes us dollar denominated cotton cheaper for buyers of other currencies.

In April 9th, ICE cotton futures touched 79.31 cents, a high level since mid 12 last year.

Jon Marcus, President of Lakefront Futures and Options, said cotton faces a psychological resistance level of 80 cents.