Market Analysis: Pay Attention To The Dynamic Trend Of Weekly Price Inventory In The Global Cotton Market

ICE cotton market rebounded from a low point this week, and March cotton closed at 68.31 cents/pound on Friday. The position of May contract exceeds that of March contract, and the focus will shift to May contract.

The daily trading volume was very high, and the total positions increased by 1852 to 289825. The certified inventory remains unchanged at 218 packages.

The supply and demand report released by the US Department of Agriculture in February was bland, but it was generally bad for the cotton market. The supply and demand balance of the United States has slightly relaxed, because domestic consumption is estimated to decrease by 100000 packages to 1.7 million packages. The adjustment resulted in an increase of 100000 packages in the ending inventory, bringing the total to 4.9 million packages. This increases the inventory to use ratio to 38.6%. Other parts of the US supply and demand balance sheet remained unchanged, with output of 14.41 million bales and export of 11 million bales.

The global supply and demand balance table shows that the consumption increased by 60000 packages to 115.95 million packages, and the ending inventory increased by 500000 packages to 78.41 million packages. As a result, the inventory to use ratio rose to 67.6%. China has the largest estimated adjustment proportion. The domestic quantity is estimated to increase by 1 million packages to 31 million packages, and the import quantity is estimated to decrease by 0.7 million packages to 7.3 million packages.

Tariff is still the central topic of the headlines, but the market may be showing signs of "tariff fatigue". The latest news from the government shows that the United States will move towards the direction of imposing tariffs equivalently and consider determining tariff levels on a country by country basis. These tariffs will not be implemented immediately. Traders believe that they are a sign of possible negotiations, which will help to boost the stock market.

The US consumer price index (CPI) and producer price index (PPI) were higher than analysts' expectations. In January, CPI rose 0.5% month on month, 0.3% higher than expected, 3% higher than expected, and 2.9% higher than expected. PPI rose 0.4% month on month, higher than the forecast of 0.3%, and 3.5% year on year, higher than the expectation of 3.2%.

The US export sales report shows that in the week ended February 6, the sales of upland cotton were strong, hitting an annual high.

In 2024/25, American businessmen sold 244700 bales of upland cotton and exported 260900 bales. This week, the speed of setting the highest annual sales volume reached the speed required to meet the current export estimate of 11 million bales of USDA. Sales have always remained above the necessary level, that is, slightly more than 100000 packages per week.

As pointed out in the supply and demand report and reflected in the export sales report of 2024/25, China did not buy a large amount of American cotton. This is partly due to higher domestic crop production than usual and concerns about possible tariffs imposed by the United States.

Puma cotton sales are stable, but the shipment volume is at an annual low. 4000 packages were sold and 1100 packages were exported.

The annual meeting of the National Cotton Council (NCC) will be held this weekend. They will release the economic prospects and planting intentions of crops in 2024/25 on February 16 (Sunday).

Since February 17 (Monday) coincides with the US President's Day holiday, next week will be a shortened trading week. Except for NCC's report on Sunday and weekly export sales report on Thursday, the data will be relatively calm.

The first notification date of the March contract is February 24. As the traders withdraw from their positions in March, trading activities may increase.