U.S. cotton planting area may be lower than expected

by:JIYALI     2021-08-08
The New York March contract issued 1,621 delivery notices. Cargill issued 1,270 and Dunavant issued 228. Allenberg is a big head, which of course means that their long head rate reaches 95%. Looking back, last week’s speculation/hedging report is very likely to show that the long position held by commercial institutions is very stable, suggesting that a certain MMM institution has a large account. As of last Tuesday, there were 125,231 bales of cotton in 2007, but the statistics were updated on Monday.   As businesses and speculators are eager to cover their positions in March, and their positions in March are extremely limited, the heavy trading volume ignited cotton prices. The strength of the March contract is mainly due to the imbalance between unpriced sales to textile mills and unpriced purchases from growers. On Friday, there were still more than 10,000 empty lots in the March contract, causing the closing price to fluctuate sharply. The closing price of the week ended at the daily limit twice.   On the other hand, technology-oriented speculators, large funds and money managers increased their holdings of May contracts. Cotton has lagged behind other commodities for a long time, and its price is generally lower than that of row crops. The Commodity Research Bureau index hit a record high in the past week. Gold, silver, and soybeans all reached new highs. Cotton broke through the multi-week consolidation box, and buyers replenished their goods.   The December cotton is following the same trend, and the battle for land has become fierce. According to the information released by the US Department of Agriculture Outlook Conference, the ending stocks of cotton in 2008-09 may fall from 4.5 million bales to 3.7 million bales. This basic cotton statistics is the basis for longs to establish a 80-90% long ratio. At the Outlook Conference, Dunavant predicted that the cotton planting area may fall from the currently estimated 9.5 million acres to 8.8 million acres. Unless the December contract breaks through 85 cents, cotton will continue to lose land in the battle for land.   During the week, March cotton rose sharply by 680 points, May contract rose by 541 points, and December contract rose by 526 points. From the perspective of the technical curve, contracts for all months have improved, or have broken through the fluctuation range of previous weeks. The gap on Thursday and Friday caused the market to be exhausted. But the May contract should find support at 7350 and 7150 (midpoint at 7250), and December support at 7950 and 7750 (midpoint at 7850).
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