No One Wants To Miss The Next "Perfect Storm" Of Cotton.
US Fortune Stone Company's latest report said last week (21-25 February) ICE cotton futures Big shock. With the arrival of the delivery period, the March contract fell sharply from 11.6% in February 17th and rebounded sharply on Friday (25).
Analysts believe that the price shocks have the following reasons:
From a technical point of view, traders in order to avoid the risk of contract delivery, a large number of withdrawals in the week of option expired, resulting in a sharp drop of 33 cents in May contracts, which gave the Bulls a chance to take advantage of the heavy blow. From a basic point of view, China's cotton yarn imports decreased by 8.2% in the same period last year, and export volume also decreased by 11.2%. The export of Pakistan's cotton yarn dropped by nearly 30%. The US Department of agriculture in the Outlook Forum predicted that the cotton planting area in the United States and the world will increase in the 2011/12 year, and the stock at the end of the year has increased, indicating that the cotton price will drop somewhat.
However, with the fall of crude oil futures and the rise of stock and grain prices in the late week,
ICE cotton
The futures trend changed, and the contract jumped rapidly in March to over 10 cents.
Meanwhile, the US Department of agriculture predicts that China's cotton imports will be close to 4 million tons in 2011/12, which will offset the negative impact of global cotton supply.
In addition, in the process of a sharp fall in cotton prices, the position of ICE futures was reduced by about 1/4, the lowest level in seven months. This shows that the selling pressure is mainly from multi position liquidation, and the selling pressure will gradually weaken after the end of the long liquidation.
Above all,
cotton
It is still a hot spot among traders. Although the price rebounded last week, there was a commercial buying scenario, but fund buying was the real behind the scenes.
If this pullback is a short-term action, it is preparing for the latter to continue to rush ahead, and no one would like to miss the next "perfect storm" of cotton.
Although the market wants cotton prices to consolidate, it is unlikely in the short term.
- Related reading
Commodity Futures Will Continue To Maintain A Strong &Nbsp, And The Trend Of Cotton Growth Will Not Change.
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