MCX cotton futures showing wild ride and paralyzed trading amid acute physical shortage, demand destruction and wild ride in ICE July contract amid ongoing on call fixation. Domestic forward curve is too much thin -lack of depth. Market is showing deep inversion. Spot month May cotton traded around Rs 1000 premium over Jun. New season October contract showing indicative bids around 38000, but no trade reported yet. Rains in part of Texas has cooled down sentiment. Chinese cotton futures also traded weak amid economic slack. Domestic cotton market is seen ultra-risk averse. Mills and buyside consumers are adopting ultra-hand to mouth purchase amid increased cash loss. Some imported cotton is seen hitting market in Jun-July. Market is now eying India and USA cotton weather as well as China covid policy, USA monitory policy and EU energy policy. Lot of distortion and disruptions in commodity and currencies markets. Short term range is seen at 46000-48000. An interim top- pause in the rally may be, BUTIt is too early to call for end of party.
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