Corn Rose Or ICE Cotton Futures Rebounded Booster

Since late May, ICE cotton futures have entered the oscillation rebound rhythm. Two consecutive tests, 70 cents / pound (May 29th and June 3rd) have not been successful. The competition between the two sides around the 70 key point price is not likely to win in the short term. However, from the sharp increase in volume and the decrease in holdings in June 3rd, the power of ICE to test and expect to stand 70 is still strong.

Some agencies believe that the factors leading to the June 3rd ICE reversal and strong rebound mainly include the following three points: first, the US dollar index has fallen sharply, and the low point has broken 97.15, which has led to the overall recovery of commodity futures; two, the 2018/19 cotton sale has become more and more prominent in recent years, which has led to a lot of speculative buying. According to USDA statistics, as of May 23rd, the United States signed 338.18 tons of cotton and signed a total of 109% tons in the year (5 years mean 102%) in the 2018/19 year. The "oversold" made the United States cotton exporters and the exporters very strong. Three, the recent days, including Texas, encountered extreme weather in the inner cotton separation area, and the cotton planting and growth were greatly affected. Moreover, from time to time, the probability of rebroadcast and replanting was decreasing, and the proportion of cotton fields abandoned or abandoned and abandoned was continuously expanded.

The author believes that there is a very critical factor that needs to be paid enough attention: the price of corn and other agricultural commodities has risen sharply, which not only leads to the increasingly prominent phenomenon of grain and cotton competition, but also will lead to the rebound and even reverse of the ICE and foreign cotton spot market, and the pattern of "external strength and internal weakness" in the cotton market will remain unchanged.

According to statistics, from May 13th to May 29th, only 12 trading days, the US corn futures price rose from 343 to 438, or up to 27.7%, and the US corn price hit the highest point since June 21, 2016. Not only corn, wheat, soya bean, soybean flour and other agricultural products are also rising rapidly.

On the one hand, the core agricultural belt in the Midwest of the United States encountered severe bad weather. Heavy rainfall caused the corn and soybean sowing to be unable to carry out normally (the planting rate of the main maize producing areas in the United States set the slowest seeding rate since 1980); some institutions analyzed the best sowing time of the US corn has been missed; in 2019, the expected increase in the per unit area yield and the total output of the United States increased rapidly; on the other hand, the US government announced the expansion of the use time of ethanol gasoline: the gasoline with 15% ethanol can be used throughout the year (previously prohibit the sale of high ethanol gasoline in the summer), so corn consumption will increase significantly. The positive and negative effects of production and marketing will directly stimulate prices of corn and soybeans in 2019. The rebound of ICE cotton futures will have a greater impact on fundamentals, peripheral markets and policy faces, but the trend of oscillation rebound and gravity shift will remain unchanged.