Market Analysis: Market Trend Analysis Of USDA Cotton Supply And Demand Forecast In A Week

With the completion of the contract delivery in March, the cotton market went into battle lightly. Obviously, the excessive decline in the early period and the high speculative short position promoted the cotton price to rise. In addition, the market focuses on several important economic data later this week.

According to the latest CFTC position report, last week's speculative net short positions reached a new high. As of last Tuesday (March 4), the net speculative short positions in the cotton market had increased by 11000 to 79957.

This Tuesday will usher in the USDA supply and demand forecast. According to the survey, traders expect that this month's US cotton output will be 14.41 million bales, the export volume will be 11.02 million bales, and the ending inventory will be 4.93 million bales. The market pays attention to the 2025 American cotton planting intention released on March 31.

US CPI data and PPI data will also be released this week. The US CPI is expected to grow 2.9% year on year and 0.3% month on month in February, compared with 3.0% and 0.5% last month. This will be the last few data before the Federal Reserve's meeting on March 18-19. Recently, the Federal Reserve said that it would take a wait-and-see attitude towards further interest rate cuts, believing that Trump's tariff policy may lead to inflation, and there are some uncertainties in this regard.

On Monday, ICE cotton futures failed to hold the intraday increase, and the market was once driven by short covering. However, at the last moment of the transaction, the sharp drop of US stocks and the decline of oil prices triggered a sell-off, and the final main contract declined slightly, while the increase of other contracts also declined significantly.

The US Meteorological Forecast Center predicts that in the next 8-14 days (March 17-23), the temperature in Texas, the Delta and the Southeast will be higher or significantly higher, the probability of rainfall in Texas will be low, and the Delta and Dongna will be slightly higher or normal. According to the report of the World Meteorological Corporation, the drought in Bahia, the main production area of Brazil, will last at least more than a week. The rainfall in Matogros and surrounding areas is beneficial to the growth of new cotton. Bahia is expected to receive rainfall on March 15-21.

At present, the market is worried about President Trump's trade policy, which may lead to a recession in the US economy. China's 15% tariff on American cotton will put pressure on cotton prices. At the same time, the dollar index may be bottomed or recovered in the near future after falling. In addition, the question about American cotton export demand may be answered in this week's USDA supply and demand forecast. Cotton prices are expected to maintain consolidation or weak trend before the release of the report.