The Epidemic Tends To Be Stable And Cotton Prices Are Clear At The Bottom.

Last week, ICE futures contract fell 138 points to 53.02 cents in July. As the virus growth curve in most countries continues to moderate, some European blockades have begun to ease. President Trump also announced some measures to start slowly opening the economy in some states. Now there are about 2000000 cases in the world, and there is no vaccine. It seems that even if the blockade begins to ease, life will not return to normal for some time.

The new crown has caused a huge economic recession worldwide. China first announced the decline in GDP and a huge wave of unemployment in India, because migrant workers have been released from factory jobs. Everyone is affected by this virus. Social isolation makes people's demand for goods and services fall off and has a huge impact on the industries that produce goods and services. With the reduction of disposable income, life is unlikely to return to normal soon.

For cotton, many countries, including Vietnam and Pakistan, have cancelled the US cotton contract. Last week's weekly weekly report showed that the net contract volume of the US cotton was -18 million a week. Although there were new sales, the cancellation contract exceeded the new sales, so the net sales were negative. Brazil cotton has begun re entering the export market for prompt shipment. Textile mills have no demand for recent quotations, but are interested in forward offer.

As the government starts printing money on a large scale, inflationary pressures may strengthen commodity prices, but the fundamentals of the cotton market remain very weak. Due to weak demand, factories are still closed, but cotton production has not changed significantly, at least in the short term. As inventories continue to grow, cotton traders will need to know who their cotton can be sold to in the near future.

As the government gradually relaxes social restrictions and people buy goods again, the market should continue to respond positively to any measures to relax restrictions, which will have a long-term impact. Although the unemployment rate in the United States is now close to 20 million. Even part of the open economy will be welcomed by investors and should provide support for the market. 48 cents should be the bottom of the cotton price, but it will not return to 60 cents in a short time.