The Market Is Starting To Speculate About How Much Cotton Prices Will Rise This Time.

In July 1st, after the ICE futures market came up with a follow up bid and the US cotton area was lower than expected, traders began to reconsider their investment strategy. Due to the reduction in the size of the US cotton market, the market is paying more attention to the weather conditions in the cotton producing areas in the United States. The weather forecast shows that in the next 6-10 days and 8-14 days, the temperature in Western and southern tip of Texas is high, and the rainfall is low. The market is very concerned about the report of the growth of crops in the next two weeks.

On the negative side, cotton demand is still frustrated. With the rise of cases in various states, some states have difficulty in restarting, and some areas are trying to completely block it, which is obviously very unfavorable for clothing retailing. For upstream consumption, the market is concerned about this week's US cotton export weekly. Although the US cotton contract is expected to exceed expectations, the weekly figures still need to be maintained at a high level, and more buyers are needed, otherwise the fear of breach of contract in the late stage will rise.

In July 1st, speculative speculation and the buying and selling of hedge traders and traders rose again. The market believes that if the drought in Texas is not resolved, this year's cotton production will have major problems. In June, USDA expects us cotton production to be 19 million 500 thousand packs and final inventory of 8 million packages, but analysts believe that if the sowing area is greatly reduced and the drought continues, the output of US cotton will likely drop to 13 million 400 thousand packages, ending inventory will drop to 5 million 770 thousand packs, which will be similar to that of 2016/17. At that time, ICE futures rose from 54 cents to 78 cents. If the US cotton export figures are ideal on Thursday, the cotton price is expected to further rise in line with the current weather and area speculation. The December contract is expected to hit the 200 day moving average, reaching 63-64 cents.

Since July 4th is the Independence Day holiday, the US labor department will issue a new employment data one day in advance. The market estimates that the number of new jobs in the United States is 3 million, and the unemployment rate is 12%.