Market Trends: Focus On The Trend Analysis Of Cotton Futures In One Week

The cotton market continues to face challenges from continued crop uncertainty and major port strikes, which have raised concerns about potential supply chain disruptions. The losses caused by Hurricane Helene are estimated to be between 300000 and 700000 bags, and the overall crop quality is also declining. The market is preparing for the upcoming supply and demand report.

Last week's trend was affected by the uncertainty of the harvest and the port strike, and cotton futures were consolidated this week (last Friday to this Thursday).

Last week's traders' commitment report showed that speculators became net buyers for the second week in a row. This, together with the uncertainty of the impact of Hurricane Helene on crops, provides some support for the market. Although the total damage caused by the hurricane is not clear, the estimated damage is between 300000 and 700000 bags.

The futures contract in December finally closed lower, driven by the pressure of strikes at ports along the east coast and the Gulf of Mexico and the weakening macroeconomic environment. China is on a week-long National Day holiday, which may be another explanation for weak prices.

Trading volume was quite light this Sunday. The total number of positions increased by 1936 to 232784.

The external market has been in a tense state as geopolitical tensions have intensified, leading to increased volatility and investors becoming cautious.

Traders assessed the impact of the current geopolitical tensions on the global supply chain, and crude oil prices soared. There is growing concern that Israel may attack Iran's oil facilities.

Workers at 14 ports in the east and the Gulf Coast began a three-day strike on Tuesday, the largest strike in more than 50 years. The dock workers have returned to work after reaching a short-term agreement, which will last until January 15, 2025. The strike led to a decline in cotton prices, as uncertainty surrounds the potential impact of cotton sales and transportation.

The US dollar rebounded from its low point and strengthened against other global currencies.

A series of employment data will be released this week. ADP employment in the United States increased by 143000, exceeding expectations. The US nonfarm employment report showed that the number of employees surged in September. Non farm employment data showed that 254000 new jobs were created in the United States, and the unemployment rate fell to 4.1%.

Export Sales and Crop Growth Report

As of the week of September 26, US export sales and shipments were flat.

In 2024/25, the export sales of upland cotton increased by 95800 bales. The shipment volume of 107100 packages is far lower than the average level of the same period in previous years.

Pima cotton sales remained stable. 9500 packages were sold and 6500 packages were exported that week.

In the United States, the overall excellent rate of cotton dropped to 31%.

Crops in the south central and southeast are the main reason for the overall decline this week.

In Texas, the excellent rate dropped by 2% to 20%. The excellence rate in Oklahoma declined by 2% to 26%, while that in Kansas rose by 9% to 49%.

In the United States, 72% of cotton bolls have been opened and 20% of crops have been harvested.

Under favorable weather conditions in West Texas, Oklahoma and Kansas, the growing season is gradually ending. The harvest in these areas has begun gradually. The upcoming weather forecast shows that the temperature is warm and the precipitation opportunity is lower than the average level, providing ideal conditions for harvesting.

Next week

The October supply and demand report will be released at 0:00 Beijing time on October 12, providing new trading clues for the cotton market. It will be interesting to know whether the USDA will acknowledge the decline in crop yields in the Southeast in the upcoming report, or whether they will wait until November.

In addition, the United States will also release consumer credit, September consumer price index (CPI) and producer price index (PP (7664, - 18.00, - 0.23%) I).