It is hard to believe that the terrible images of the war in Ukraine are diminishing the interest of public opinion. Faced with the interests of countries deprived of raw materials in this region, the most cynical repeat "Business as Usual" over and over. Brazil, for example, is waiting to receive a slew of fertilizer ships recently loaded in the Black and Azov Seas, so crucial is its need to produce agricultural commodities for its economy. 

China, whose attitude to the conflict is being scrutinised from all sides, is embroiled in a resurgence of COVID on its territory, leading to the confinement of millions of people, especially in Shanghai. In this context, the growth of its already slowing economy is a cause for concern, even leading to fears of a recession that would impact the world economy. 

In this context, the cotton market remains very well oriented even though certain signals seem worrying: 

• From a technical point of view, the liquidation of sales at on call prices appears to be more problematic every day for the July 22 deadline. How to solve the equation that represents the end of the harvest with an overestimation of the current prices and an underestimation of the new harvest. The gap between the two is so large that it weakens the entire market, making arbitrage more uncertain. At present, it is difficult to decide to fix as the number of sellers is low and the losses abysmal. 
• The open position is constantly decreasing, indicating a lack of interest on the part of certain operators in our market. How to arbitrate production on a market taken by storm by speculation that buys cotton to protect itself from the throes of inflation, which is not expected to abate in the coming months or years. 
• A slowdown in growth and sustained inflation should undoubtedly impact textile consumption, which seems to us to be largely overvalued. 
• The slowdown of the Chinese economy should once again have consequences on the freight market, which is slow to recover despite the pharaonic profits of all shipping companies. Loading and delivering goods is always a challenge when it comes to avoiding a nervous breakdown. 
• The rise in cotton prices is not followed by those of yarn, which tend to plateau. Demand is therefore legitimately slowing down and pushing China to sell its stocks of imported cotton to neighbouring countries. Even if Bangladesh maintains its level of demand, India remains timid in relation to its capacities. It is difficult to know exactly what the needs will be before the arrival of the new crop, but they will be difficult to cover as it is difficult to find and ship the best qualities. Nevertheless, the suspension of import taxes in India until September 22 has stimulated the market. 

However, the market still has upside potential if the drought continues to ravage Texas and the rains continue in Brazil. 

Similarly, the arbitrage between food and cotton will be difficult to make, as ongoing shipments in the Black Sea could slow the advance of grains. 

The nervousness that has gripped all markets will not stop immediately and should allow cotton to hold its own