The cotton market rallied its limit yesterday by 400 points.
This is likely due to the combination of Rogers roll, mill on-call fixations, the market’s oversold condition, and profit-taking on recent shorts.
At the end of the two-day monetary policy meeting, Fed finally raised interest rates by 0.75 percentage points. Fed’s rate decision comes after a report showed the US labor market continued to be strong. The low unemployment rate is an important basis for the Fed to stay tough.
In the following press conference, Mr Powell said that Fed’s fight against inflation was far from over.
Internationally, news is emerging as to just how severely China’s zero tolerance COVID policy has affected its textile consumption and thus, its raw cotton offtake. Commodity and petroleum markets have surged after rumors circulated on social media that China would relax its anti-epidemic restrictions by March next year.
The market is now becoming focused on the Mar and May contracts as index funds roll out of the Dec contract.
ICE December contract is forecast to meet near resistance at 77.64, 80.02 and 88.76. “
Posted on 3/11/2022
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