Market Analysis: Xinmian Is About To Enter The Peak Period When The Market Continues To Consolidate In A Narrow Range

The cotton market continued to consolidate in a narrow range, and traders waited for the release of reports and data on Thursday and Friday. According to the latest report, the contracted export volume of American cotton fell by 7% last week, and the shipment volume fell by 11%. The export demand of American cotton remained sluggish.

Data from the US Department of Labor showed that the US core CPI rose 0.3% month on month in September, higher than the expected 0.2%, and 3.3% year on year, higher than the expected 3.2%.

The USDA supply and demand forecast will be released on Friday. The market estimates that the output of American cotton in 2024/25 will be 14.27 million bales, lower than 14.51 million bales last month, the export volume will be 11.65 million bales, lower than 11.8 million bales last month, and the ending inventory will be 3.98 million bales, slightly lower than 4 million bales last month.

On the same day, although the market trend was not obvious, ICE cotton futures closed slightly higher, and traders dared not bet heavily before the release of the supply and demand forecast. Analysts said that the market is waiting for the release of the report, and it is expected that American cotton production will be reduced, while the export volume will also be reduced accordingly. Judging from the weekly export report, the poor sales of American cotton continues. At present, the demand increment is still difficult to appear, which has little support for the price.

On the same day, the international oil price rose by more than 2% because of Israel's direct attack on Iran. However, the US Energy Agency lowered its demand forecast for 2025, saying that weak economic activities in China and North America led to a decline in demand.

Analysts believe that the new cotton market in the northern hemisphere is about to enter a peak period. Because demand is not enough to boost prices, even if the supply continues to decline, it cannot change the situation of abundant supply. At the same time, the macro speculation has come to an end. Without the influence of external forces, the probability of cotton prices continuing to fluctuate in the short term is high.