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American cotton: can demand start cotton price recovery?

Huaxing bobbins

On March 11, while U.S. stocks continued to plummet, ice futures rose in early trading. Last week, the signing and shipment of American cotton reached an annual high, and China's procurement is quite active. The market expects that Thursday's American cotton export weekly report will be another bright figure.

The next important event is the USDA cotton planting forecast report on March 30. So far, all the unofficial surveys show that the US intends to reduce the area of cotton planting in 2020. Not long ago, the U.S. agriculture Outlook Forum also predicted 12.5 million acres of cotton planted in the United States this year, and the recent collapse of new flower contracts may further reduce the area of interest.

On March 11, ice futures closed slightly higher, supported by textile factory buying after cotton prices tumbled, waiting for the weekly USDA export sales report on Thursday. "We see a lot of cotton mills moving at this price," said Fortis. According to the price futures group in Chicago, the price of cotton is too low and strong demand is expected.

The World Health Organization novel coronavirus pneumonia epidemic has a pandemic. The U.S. stimulus package to mitigate the impact of the new crown disease may include tax cuts, but it lacks specific details. Analysts say that because novel coronavirus pneumonia has a pandemic feature, grain and cotton prices may be stuck in the region unless substantial breakthroughs are made in the US stock market.