Area Report To Be Released Soon, Can Cotton Price Break Through The Rise?

Last week (June 12-25), the easing of macro pressure (U.S. dollar stabilization, U.S. stock recovery) allowed cotton fundamentals to dominate the market. Ice futures rose slightly under the circumstances of good demand for us cotton, uncertainty of US cotton area, suspense of growth and tight supply of new cotton in the northern hemisphere before listing.

The report will be released on Wednesday, June 30, us time. According to a Reuters survey, 17 analysts expected the average cotton acreage in the United States to be 11.856 million acres, ranging from 11.5 million to 12.4 million acres, compared with 12.036 million acres in March. Obviously, the market is expected to reduce the actual planting area of American cotton. It is worth mentioning that only two of the 17 analysts are expected to have an area of more than 12 million acres, and two of them are expected to be 12 million acres, and the rest believe that it is less than 12 million acres.

In recent weeks, the growth of cotton in the United States has been greatly restored, mainly due to the large-scale and long-term rainfall in Texas. With the increase of the proportion of good growth in Dezhou, the abandonment rate of Dezhou will not be very high this year. Therefore, the US cotton yield forecast in July may be increased, which is determined according to the actual planting area in June.

Cotton planting in northern India is advancing rapidly and the area is expected to increase year on year. Some analysts believe that the expansion of cotton planting area in Gujarat and Maharashtra, the largest producing states, is mainly due to rising cotton prices and rising MSP prices, which are expected to expand by 5% as a whole. At present, Indian monsoon rains are developing northward and have entered most parts of Gujarat. The accumulated rainfall since the rainy season this year is higher than normal.

The early harvest of Brazil's new cotton has started (early sowing cotton in bayia and Mato Grosso). The yield per unit area of bayia is very good, and that of Mato Grosso is also good. At present, only early sowing cotton is harvested, and individual quality problems appeared earlier have no significant impact.

As of June 18, there were nearly 50000 unpriced contracts in December contracts of ice futures, and 21300 contracts in March, with a total of 120000. Therefore, the point price in the process of cotton price decline will provide support for the market.

Technically, the withdrawal to 63 cents in mid June should have ended. As long as the contract in December holds this price, the cotton price will break through the 88.50 cents set in the early period of the July contract, or even break through 89.28 cents, setting a new high.