Influenced By The Trend Of US Dollar Against US Cotton (ICE), The Trend Analysis Of Cotton Futures Last Week

Despite the strong weekly sales report data of American Cotton, cotton prices rebounded slightly and then fell, driven by market pressure and external factors. Despite strong export sales, the outlook remains uncertain, and concerns about tariffs and global economic stability are growing. Will market volatility continue as key economic reports and government funding deadlines approach?

The US dollar has a great impact on the trend of American cotton. As of Friday (February 21), the ICE index of May cotton contract fell 0.21 cents, and the settlement price was 67.47 cents/lb.

The National Cotton Council (NCC) of the United States released the 2025 economic outlook and the 2025/26 annual planting intention report, predicting that the U.S. cotton planting area will decline and the ending inventory will increase. However, they predict that under the premise of economic stability, global consumption will rise.

Before facing selling pressure, the cotton market experienced a two-day rise. NCC reported that the decline of planting area provided support for the market, but external market news brought resistance.

Traders continued to extend the three-month cotton contract. The price point transaction was active, but the price was difficult to break through the key technical level, leading to further selling in the market.

West Texas, Oklahoma and Kansas are conducting the discovery period of 2025 cotton insurance price. As of this week, the expected insurance price is 69 cents/pound. The insurance price in the southernmost area of Texas is 70 cents/pound, and the insurance price in the central area of Texas is 69 cents/pound.

The stock market will hit a new high, but concerns about tariffs and global market uncertainty led the market to remain cautious. At the end of the week, weak earnings forecasts further weighed on the market.

Retail sales in the United States fell 0.9% month on month in January, the largest decline since March 2023. The decline exceeded the estimated decline of 0.1%. It may be affected by severe cold weather, wildfires and motor vehicle shortages, suggesting a sharp slowdown in economic growth at the beginning of the first quarter. Retail sales increased 4.2% year on year. Core retail sales fell 0.8% month on month, and the reading in December was revised up to 0.8%. The data hardly changed the view that the Federal Reserve would wait until later this year to cut policy interest rates.

According to the minutes of the Federal Open Market Committee (FOMC) meeting on January 28-29 released on Wednesday, policymakers of the Federal Reserve pointed out that since the government has been arguing over the spending plan, and the legally prescribed borrowing limit will affect the way the Treasury manages cash, it is a challenge to accurately understand market liquidity.

In the past week, the US dollar has fallen to a low point in more than two months. Nevertheless, commodity prices are still under pressure.

This decline was driven by the rise in other currencies and the increase in the number of people applying for unemployment benefits.

The US export sales report is one of the strongest reports this year, highlighting strong sales and the highest annual shipments.

The export sales report released by the US Department of Agriculture (USDA) on Friday showed that in the week ending February 13, the net export sales of US cotton in the current year increased by 312500 bales, 28% more than the previous week, and 18% more than the average of the previous four weeks, including a net increase of 41400 tons in export sales to China. In the next year, the net export sales of American cotton increased by 34300 bales. The export shipment of American cotton was 298300 bales, an increase of 14% over the previous week and 39% over the average of the previous four weeks, including 16400 bales for China.

Most traders sell three-month cotton contracts, but although the first delivery notice date on February 24 (Monday) is approaching, there is still trading activity in the market.

In terms of data, the upcoming reports include consumer confidence index, gross domestic product (GDP), export sales report and personal income, the preferred inflation indicator of the Federal Reserve.