The Market Enters Into The High Incidence Period Of Hurricane, And The Fluctuation Range Of Cotton Price May Increase

On September 14, the market came out of the flat forecast of supply and demand last week. The news that tropical storm "Sally" was about to land and attack new cotton in the delta of the United States invigorated the market, and ice futures soared all the way in the session. "Sally" is expected to make landfall in the US Delta as a category 2 hurricane on Tuesday, bringing heavy rain and winds of more than 80 miles per hour. According to the latest data from the U.S. Department of agriculture, as of September 13, the boll opening rate of new cotton in the Delta region of the United States is 50-80%. The market is concerned about the impact of "Sally" on the new cotton in the delta.

On September 14, hurricane speculation pushed cotton prices up sharply, and the fall of the US dollar index and the sharp rise of the US stock market also helped cotton prices stay at a high level. Ice futures closed at a new high in this round of rebound. In addition, last Friday's USDA supply and demand forecast also had a positive effect on fundamentals. The US cotton output was much lower than last month and far lower than the market expectation. However, the US cotton export reduction led to the US cotton final inventory still above 7 million bales, and the inventory consumption ratio of 41% was still the highest level since 2007 / 08.

On September 14, U.S. Treasury Secretary manuchin commented that the U.S. deficit is expanding and the government does not have any new stimulus spending, which will not endanger the U.S. economy. The U.S. government's additional financial support for the fight against the epidemic will dilute the purchasing power of the dollar, and opinion polls show that former Vice President Biden is leading, so the dollar has entered a downward phase. It is reported that the U.S. stock market closed up on Monday, signs of progress in the development of a new crown vaccine and a wave of news about a multi billion dollar deal boosted investor optimism.

At present, the signing progress of American cotton has reached 51% of USDA's forecast, higher than the average value of 45% in the same period in recent five years. China is still the largest buyer of American cotton. Last Friday's CFTC position report showed that the net long position of the fund decreased slightly, and the net long position was 46400 at present. In addition to "Sally", there are also a number of tropical cyclones and disturbances in the Atlantic region that cause market concern, and the fluctuation range of cotton price may increase in the short term.