After the Mid-Autumn Festival, the international market pressure continues to increase, in the U.S. dollar continues to record high, the United States inflation exceeded expectations, cotton supply and demand decline and other adverse factors under the influence of ICE cotton futures main December contract below 100 cents, further open the downward exploration space, technical graphics trend further turn worse. From previous years, with the approach of the new cotton listing, the past at this time is often the stage of the market bottom, this year's situation seems to be more clear, macro economic superposition fundamentals turn weak, the market decline is inevitable.

In fact, the biggest cause of the decline is US inflation and the resulting rise in Fed rate hike expectations. On Tuesday and Wednesday, Sept. 20-21, the Fed holds its monthly rate-setting meeting. Owing to an unexpected rise in the CPI in August, and Powell has reiterated strict controls the operation of the inflation will persist, so the market is generally believed that the fed's benchmark interest rates will go up again by 75 basis points, which can lead to high $continuous innovation, affect the purchasing power of consumers in major economies, triggered a mass sell-off of dollar-denominated commodities. As a result, the Dow Jones Industrial Average in the United States lost 4 percent for the week, approaching a three-month low for the year.

In the macro economy continues to contract under the big background, cotton terminal consumption situation and how? Recently, there are still a lot of reports about US terminal retail inventories and falling demand, which is very consistent with the earlier news of global factory start-up decline, and also indicates that downstream forward orders are reduced. Foreign analysis institutions believe that, for the textile industry chain, this year's "winter" has already come, later with the consumption of inventory, production has a gradual recovery trend, but the supply chain as a whole replenishments may have to wait until the first half of next year. Before the textile industry inventory pressure resolved, cotton prices are difficult to rise significantly.

Last week, the US Department of Agriculture finally reissued weeks of delayed US cotton export data. In total terms, the four-week cumulative sales of just 800, 000 packs is not surprising, but it is not discouraging either. The market believes that, at least in terms of US cotton exports, excessive concerns about a decline in consumption are not necessary. In fact, the U.S. has committed 8.3 million packs so far in 2022/23, with 1.45 million packs shipped, up from 6.65 million packs and 1.25 million packs in the same period last year, according to the USDA. The U.S. Department of Agriculture's September report projected exports of 12.6 million bales for the current year, meaning weekly shipments would only average 240,000 bales for the rest of the year, and no less than 200,000 or 300,000 bales for most of 2021/22. As a result, the export target of 12.6m bales is expected to be relatively easy to achieve in the face of a significant reduction in US cotton production this year. From this point of view, the basic face of the United States cotton prices still have a strong support.

The weather forecast shows that the dry and hot weather in the next two weeks in the US cotton producing region will be favorable for new cotton ripening and harvesting. However, the recent continuous rainfall in the US cotton producing region has led to the situation of broken bolls and stiff flares in many areas. The room for new cotton production to rise is likely to be limited, and the US cotton supply will continue to support the market. But if demand continues to suffer, a lack of supply is unlikely to drive prices much higher. In addition, it should be noted that although there are only 9.12 million on-call contracts in ICE futures this year (including 5.37 million in December), which is far lower than 14.64 million in the same period last year, the production of US cotton this year is 4 million less than that of the same period last year, so the role of the price tag when the contract expires cannot be ignored.