The Pfizer vaccine has been approved by the FDA and distribution is set to begin today in the US. However, the virus continues to surge and unemployment has its highest level since September suggesting the economic recovery there is slowing. A vaccine is no doubt crucial for economic recovery but in the meantime congress cannot agree on a stimulus package which is becoming more and more urgent. 

The retail sector continues to be hammered by the effects of COVID 19. Last week Arcadia Group which owns brands such as Topshop and Topman, fell into administration. The fall of the UK's largest retailer puts 13k jobs at risk. The long list of retail casualties continues after other large names such as TM Lewin and Monsoon are also entering administration in the UK. 

We saw enquiry in the week come in from a variety of markets most notably Bangladesh who booked good quantities of WAF and Indian cotton over the week. Pakistan have been looking for cheap cotton and US recaps seem to have adequately fulfilled this demand. At origin in West Africa there were also some successful old crop tenders for Jan to March shipments. 

The WASDE report surprised many with some large scale changes. The US crop production was reduced by over 1 million bales with the latest estimate at 15.9 million bales. Productions in India and Pakistan were also cut by 500k bales each. Global production is now forecast at 113.9 million bales, the lowest since the 16/17 season. 

Global consumption was also increased to 115.6 million bales for the 20/21 season, we do feel that this is perhaps overstated. The report was overwhelmingly bullish and it will be interesting to see whether the funds decide to take a further long position in cotton based on these new fundamentals. 

US sales and shipments were again strong with China and Pakistan being the biggest. Due to the storms in the US over the last few months, not only has this brought production down as highlighted in the WASDE but it has also affected qualities that are not deliverable to the board. These off grades have proven popular in Pakistan and should continue to be well sold there. 

As mentioned, the global cotton balance sheet is tightening and from a fundamental point of view it is hard not to be bullish. Perhaps in 'normal' times a WASDE report of such a nature might have seen the market go limit up. We are however not living in normal times and should be aware of perceived global risks that could lead to market corrections. 

• The vaccine may not be the silver bullet for us to return to normal and distribution will pose major headaches. 
• Any adverse reactions to the vaccine or vaccines that are not as effective as the trial data suggests 
• President Trump is coming to the end of his Presidency and may want to leave office passing bills to upset the future presidency, particularly around trade with China. 
• The economic recovery from the virus may take many years, and governments are saddled with huge debt piles that will need to be reimbursed. 
• An escalation in currency competition that we are currently seeing around the world.