Cotton Futures See Modest Gains Despite Weekly Declines
On Friday, cotton futures ended with contracts climbing by 11 to 18 points. Although March cotton faced a tough week, falling 121 points, the trading environment showed signs of recovery. Positive influences included a dip of 592 points in the US dollar index and a rise of 13 cents per barrel in crude oil prices.
Cotton Production on the Rise
The latest Cotton Ginnings report disclosed that 1.748 million running bales (RB) were processed in the first half of December. This brought the total for the marketing year to 11.425 million RB, reflecting a notable 13% increase compared to last year.
Speculation Trends: A Shift in Positions
According to the CFTC Commitment of Traders data, managed money spec funds recorded a net short of 7,034 contracts by December 17. This marks an increase from a net short position of 29,257 contracts as of the previous Tuesday, indicating a growing bearish sentiment among traders.
Export Sales Lag Behind Projections
Data on cotton exports revealed total shipments of 2.411 million RB, which is a 15% decrease from the previous year. Currently, these shipments account for only 23% of the USDA’s export forecast, trailing the expected 27% average rate for this period. Overall, total shipped and unshipped commitments stand at 7.207 million RB, down 11% year-over-year, representing 68% of the USDA projection—below the anticipated 75% pace.
Market Transactions and Index Updates
The Seam noted 7,902 bales of online cotton sales on December 19, averaging 58.15 cents per pound. Additionally, ICE cotton stocks remained stable on Thursday, resting at 20,113 bales of certified stock. The Cotlook A Index dipped by 50 points on December 19, marking a new level at 78.35 cents per pound. The USDA Adjusted World Price (AWP) experienced a decline as well, falling 113 points to 55.09 cents per pound, effective through next Thursday.
Cotton Futures Closing Prices
Mar 25 Cotton closed at 68.06, up 15 points.
May 25 Cotton closed at 69.17, up 14 points.
Jul 25 Cotton closed at 70.12, up 14 points.
At the time of publication, Austin Schroeder did not hold any positions in the securities mentioned in this article. All included information and data is for informational purposes only. For further details, please refer to the Barchart Disclosure Policy
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