The idea that the summer heat might send the cotton market into a quiet lethargy did not turn out to be true, there is no time to sleep with how things are currently moving in our market. 

The shipping industry is certainly not sending us to sleep. Container prices have continued to climb whilst getting goods on board has become a real "nightmare". You have to beg, plead and pray... but nothing is done, the delays are getting longer and in some cases it is impossible to find a shipping line to ship to certain ports such as Chittagong in Bangladesh. 

As a result, margins are being squeezed whether sold at a fixed price or on call, whilst cotton remains unmoved in the ports to the dismay of many suppliers. The overall costing (from FOB to CNF) has increased dramatically in recent weeks. The current basis price that can be achieved for cotton should be put in some perspective when we consider these higher costings. 

The market keeps on strengthening with perhaps some concern. Open interest continues to grow with suppliers and traders on one side who are net sellers and speculators on the long side holding a position that is historically very high. The on-call sales position is already at historic levels with many contracts awaiting fixation. 

To top it all off, we are entering the hurricane season with Ida heading for the Gulf of Mexico. 

Yet the demand situation is perhaps not as buoyant as everyone is claiming, especially when we see that Vietnam and Bangladesh are still in strict lockdowns. 

The USDA's weekly sales report confirmed the difficulties of shipping even from US ports, but especially the slowdown in Chinese sales which we did not expect. 

However, we should not believe that the situation is idyllic even if the state of demand appears to us to be overestimated, the production is also to be looked at with some suspicion: India, Pakistan, West Africa, Brazil could all see a fall in production and lower stocks, similar to the situation in China. 

However, the talk across the world is for a prediction of overheated economies with commodity prices continuing to rise even though there is plenty of stock, as seen in the rice market or certain grains. Employment is also under pressure and not just in the US banks. All the ingredients are now in place for a return to inflation, which many are calling for in order to pay off the soaring public debts built up during the COVID-19 pandemic. The welfare state has a price. 

At the same time, the FED continues to support the dollar against all currencies, and the target of 1.15 against the euro by the end of the year seems to be becoming more and more likely. 

The volatility of our market should continue for a few more months, until the uncertainties begin to fade.