International Observation: Cotton Price Is Expected To Maintain A Stable Trend In The Short Term

 

US retail sales data in August were better than expected and US cotton exports remained stable, boosting cotton prices.

U.S. retail sales rose 0.3% year-on-year in August, while market expectations were flat, according to the commerce department. However, retail sales in July were adjusted from flat to 0.4% year-on-year.

US cotton export data has not been released for a month in a row, and USDA finally reissued the data of previous weeks on September 15. From the data, in the past month, the signing situation of American cotton remained stable, with a total contract volume of 800000 bales in recent four weeks, which was basically in line with the market expectation, and also made the market feel a little relieved on the demand side.

Bigger buyers are not attracted to ice futures. Generally speaking, the US cotton export data did not bring any surprise. Nevertheless, both US cotton exports and US retail sales did not show expectations of a collapse in the demand side of cotton, and cotton fundamentals continued to remain stable.

At the same time, energy prices fell sharply, expectations of lower demand and the continued strength of the dollar before the Fed raised interest rates overshadowed supply concerns. The International Energy Agency said this week that crude oil demand growth may gradually stop in the fourth quarter of this year, and now crude oil inventories are on the rise.

Relevant important reports have been published, and there is no new significant negative for the time being. At present, new cotton in the northern hemisphere is about to be listed. The market continues to pay attention to the changes in the supply level and the impact of the Fed's interest rate increase on commodities. The probability of a deep fall in short-term cotton prices is small, and it is expected to maintain a stable trend.