ICE cotton futures continue under pressure from “a strong dollar, and broader financial market risk aversion due to concerns about rising US interest rates.”
- ICE May: closes at 82.00 c/lb, down 87 points
- ICE July: closes at 82.76 c/lb, down 84 points.
- Open interest (OI): ICE May increased by 21,385 to 83,538 contracts, while total open interest on the exchange decreased by 8.5% to 196,061 contracts.
- Commodity market as well as stock market is going down. Looks like the last 2 days, there was a risk avoidance mode. Investors and speculators are closing positions or building short positions in the market.
- Wall Street’s main stock indexes fell after stronger-than-expected retail sales data provided further evidence of the resilience of the US economy, raising concerns that the Bureau of The US Federal Reserve may continue its interest rate hike campaign.
- The dollar (USD) meanwhile, extends gains to six-week high.
- (checkmark) The US Department of Agriculture’s weekly export sales report released at 8:30 a.m. EST on Thursday shows, Vietnam and China were the two strong buyers for the week.
Sales for crop year 22/23 reached 216,900 bales (RB), and exports reached 186,400 bales (RB). While Turkey reached 72,600 bales last week, this week’s report lacks data, so it is possible to see some cancellations in Turkey due to the impact of the earthquake there.
- Much of Turkey’s spinning industry is located very close to the epicenter of the earthquakes. News about Turkey, Ekonomi newspaper reported:
- There are about 500 textile factories in Kahramanmaras, the epicenter of the 6/2 earthquake;
- Factories can restart production in about 6 months;
- Textile workers in the provinces are in “misery”;
- Even if there is no physical damage in the mills, recalibration of yarn machinery can take up to a month;
- The head of the Turkish Clothing Manufacturers Association said it would be difficult to find jobs because people had left the city. Foreign buyers are showing sympathy at the moment.
ICE Cotton Futures Forecast, chart lows at 79.96 – 80.36 and market highs at 88.80 – 89.31.
Report USDA, on-call contract, and graph forecast as follows:
Posted on 17/02/2023
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