US Federal Reserve Weakens Chinese Buyers To Sign New Cotton In 2022 / 23

According to CFTC statistics, as of June 10, 2022, there are only 18865 on-call contracts on ice futures 2021 / 22, a significant decrease of 16864 compared with May 27, with a decrease rate of 47.2%. In just two weeks, the on-call point price contract plummeted by nearly 50%.

Industry analysis shows that, from the end of May to the middle of June, ice contracts in recent months not only broke through 140 cents / pound and 135 cents / pound (the intraday low of 134.12 cents / pound), but also the low consolidation time was relatively long, resulting in a large number of on-call contracts concluded by buyers; On the other hand, the buyer and the seller need to adjust the contract price from the old to the new in December (on the other hand, the buyer and the buyer need to pay for the futures contract in July to pay for the contract). From the perspective of position and trading volume, the focus of both sides' stalemate and competition has shifted to 2022 / 23.

According to the weekly report released by USDA, although the net contracted volume of us upland cotton in 2021 / 22 is only 6010 tons in the week from June 3 to 9, 2022, which is 90% lower than that of the previous week, reaching a new annual low. However, the contracted volume of net US upland cotton exports in 2022 / 23 is 86200 tons, which is up sharply compared with that in April / May. Among them, China's net contracted cotton is 82500 tons, accounting for 95.7% of the total contracted amount of American cotton in that week.

According to industry analysis, ice's main contracts fell below 118 cents / pound and 115 cents / pound in early June (the intraday low of 114.92 cents / pound), falling into the psychological range preset by Chinese purchasing enterprises; In addition, due to the drought and insect pests in Texas and the continuous high temperature in the Central South / Southeast cotton region of the United States, the United States was worried about the continuous high temperature; In addition, due to the risk of economic recession, the US Federal Reserve's aggressive interest rate hike may be significantly weakened in September, so Chinese buyers bargain on bargains and sign a large number of new cotton in 2022 / 23.