Cotton markets fell when they opened on Nov. 6, with some traders betting that Trump's election victory would lead to new tariffs and restrictions. However, the details remain to be seen. Traders continue to await the Fed's meeting decision, the weekly US cotton export report and the release of USDA supply and demand forecasts.
Markets believe the Fed will announce a further 25 basis point rate cut after Wednesday's meeting, but at the same time pay more attention to the subsequent press conference. The Fed's normal Tuesday/Wednesday meeting schedule has been changed due to the US election. At a later press conference, the Fed could spell out its plans for further rate cuts in December or beyond, if necessary.
The National Hurricane Center has upgraded Tropical Storm Rafael to hurricane status, notably as the storm's track shifts westward toward the southern Texas coast. The intensity of the hurricane is far less than "Helene", is expected to have a limited impact on Xinmian. At present, the new cotton harvest in the United States continues to accelerate, 63% completed last week, but the next five days from Texas to the Southeast will be heavy rainfall, which may cause resistance to the cotton harvest.
Although Trump's victory led to a sharp fall in cotton futures during the day, there was little change at the end of the day, which may have a certain relationship with the strengthening of the grain market. On Friday, the U.S. Department of Agriculture will release supply and demand forecasts, and the market is expected to continue to reduce U.S. cotton production slightly, because Georgia may have more production cuts due to the impact of the hurricane, and U.S. cotton exports are expected to remain unchanged.
Last week, the U.S. net export contract for this year's upland cotton reached 189,000 bales, which has remained above 150,000 bales for three consecutive weeks. In the same period last year, US cotton exports began to accelerate significantly, starting from the week of October 26, the contract volume reached 457,000 bales, 396,000 bales, 331,000 bales and 334,000 bales.
With the US election out of the way, traders are focused on the upcoming Fed meeting decision and the subsequent weekly US cotton export report and USDA supply and demand forecast. In view of the recent continued low cotton prices to stimulate demand, US cotton exports are expected to remain active, and the overall trend of the cotton market is expected to stabilize.
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