The news of the OMICRON variant is now reassuring, the virus is spreading faster than the others but its danger would be less. 

As expected the USDA supply and demand report was a non-event, which was ignored by both traders and the market. 

The figure for cotton imports into China was revised downwards slightly, as we celebrate the 20th anniversary of the Doha agreements which saw the China join the WTO. At the same time, the American authorities have confirmed the boycott of products made with cotton from Xinjiang. In such a context, China has only one alternative:

• either to give up exports and dedicate production to the domestic market
• Either the country remains the textile factory of the world by increasing its imports to maintain its level of exports while the cotton from this region would go to the domestic market 

The situation of the Evergrande Company continues to worry, as it has not been able to honor the repayment of part of its debt (300 billion U.S. dollars) that has come due. All of this is taking place against a backdrop of great nervousness on all financial markets, which are seeing inflation taking hold in all countries, particularly in the USA, where levels are now reminiscent of those of the 1980s. The euphoria that reigned throughout the COVID crisis seems to have to fade in the face of “real world” realities, such as Bitcoin which has fallen heavily in a few weeks. 

Fertilizer prices have been rising steadily for the past year, with no one knowing when the increase will end. American producers have taken legal action, arguing that the rise in agricultural products alone cannot explain the rise in fertilizer prices and distort the law of supply and demand. However, between gas prices, retaliatory measures against Belarus - a major potash producer - and the very high demand for fertilizers on all continents, how could this market escape overheating? 

The freight situation is just as worrying when you look at the weekly export figures in the United States or when you try to export goods by ship. Booking a shipment today is a challenge. To sell with a well-defined embarkation period is perilous, and to talk about "transit time" would be madness. As long as the disorder at sea is not resolved, international trade will not be able to resume its normal course. What sense do the futures have if we cannot ship at a specific time because of a lack of containers or vessels? What will be the reality of the carry-over stocks at the end of the season (31th of July)? 

In such a context, the US dollar should remain stable while waiting for a possible increase in rates, as well as cotton prices, which should continue to "live" around 105 USC / Lb in the weeks to come.