ICE Cotton Futures Main Force Can Stand 60 Cents Pass?

In June 17th, ICE cotton futures contracts continued to oscillate upward, opening up 60 cents / pounds strong resistance position, so that bulls, funds, cotton trading enterprises bullish to do more emotional recovery.

Some international cotton traders and investment institutions believe that the reasons for the recent shift of ICE's focus are as follows: first, the US trade representative, Mr lettse, said recently that since the entry into force of the first stage agreement on Sino US trade and economic cooperation came into effect in February, the export of US cotton to China is much higher than the previous level, but it is still lower than this year's target of raising substantially. However, it did not disclose the specific targets for the purchase of cotton at the end of the year. Two, the outbreak of the conflict between China and India has stimulated the rise of ICE. The industry is worried that the export of India cotton to China in 2019/20 and 2020/21 will be greatly affected. Foreign Ministry spokesman Zhao Lijian said that China and India are carrying out close communication through the diplomatic and military channels to solve the problems. Three, the dry hot and windy weather in the western Texas State has little chance of short-term rainfall. Not only does it not seriously affect sowing, but also the early "sowing" cotton seeds are hard to germinate and germinate; four, the US Federal Reserve cuts interest rates plus the US government's unlimited financial stimulus. Relatively strong performance; coupled with the rise of crude oil and gold, the role of ICE should not be underestimated.

Can ICE stand firm and back up 60 cents / pound to continue to rebound, test 65 cents / pound or even 68 cents / pound? The author's view is that there is little hope that the two sides will continue to compete in the 57-60 cents / pound box, and the main contract will hold 60 cents per pound. The main reasons are as follows:

First, the probability of the outbreak of the second outbreak of the new crown disease has increased significantly, and the impact on the global economy, trade, transportation and exchanges continues. Not only has the US, India, Germany, Turkey and other confirmed cases rebounded recently, but China's situation is also not optimistic.

Second, India's cotton planting area increased significantly in 2020. Supported by the MSP and the timely arrival of the southwest monsoon, some India institutions and cotton enterprises have predicted that the cotton planting area will grow by 24% over the same period or increase by the year. In the second half of 2020, in the second half of 2020, the CCI will focus on the sale of lint, and the new cotton will also be pushed to the international market.

Third, the US cotton exports to China are good, but the number of buyers who cancelled contracts in Turkey, Pakistan, Indonesia, Bangladesh and other countries also increased significantly.