Last Friday (December 20th) continued to climb, and since the end of August, ICE futures have risen by more than 10 cents. For now, the news on cotton fundamentals is more positive. China and the United States are preparing to sign trade agreements next month, and the US cotton exports have been doing well in recent years. The current progress has reached 72% of the USDA forecast, which is higher than the average value of 65% over the past five years, and only 128 thousand packages can be completed per week for the rest of the year.

Many economists are uncertain about how China will complete US $40 billion purchases of agricultural products in the next two years. In addition to the obvious financial and practical bottlenecks, such large-scale procurement will empty the supply of US agricultural products, thereby hurting the interests of other countries. In addition, there may be problems with the WTO rules, so what is going to happen in the next 2020-2021 years is worth noting.

Of course, the biggest uncertainty in 2020/21 is weather. Whether it is global warming or climate change, catastrophic weather events are rapidly descending into the earth. Now Australia is the first to bear the brunt. The recent extreme heat has made the cotton production unsustainable in the country. As an important cotton exporter, Australia cotton's position in the Chinese market is very important.

In December 20th, ICE futures continued to rise. The agreement reached an important driving force in the Sino US trade negotiations. The two sides have reached an agreement orally and plan to sign an agreement at some time next January. ICE futures contract rose 1.16 cents in March, the highest since May 6th this year. Technically, the main force of ICE futures has broken through the 200 day moving average, which is a signal for buyers and long lines to do more for speculators.

This week, the United States will enter the Christmas holiday. The Christmas Eve trading will be concluded ahead of schedule, the Christmas day will be suspended, the transaction will resume on Thursday, and the US cotton export weekly will be postponed one day.