Cotton Futures Decline Amid Mixed Economic Signals
Cotton futures experienced losses ranging from 70 to 149 points on Friday, with the March contract down 65 points for the week. Economic indicators presented a mixed picture: the US dollar index rose by 481 points, while crude oil increased by $2.69 per barrel. Much of the market’s attention was drawn to the disappointing data released by the USDA this morning.
Strong Ginnings Report but USDA Predictions Raise Concerns
The Cotton Ginnings report revealed that 1.626 million running bales (RB) of cotton were ginned during the latter part of December. This pushed the total for the season to 13.051 million RB, marking the largest output in three years and an 18% increase over last year’s figures.
Meanwhile, the USDA revised its cotton production estimate upward by 150,000 bales to 14.41 million. The yield saw an increase of 44 pounds per acre, although the number of harvested acres was decreased by 360,000, settling at 8.27 million. Due to a 300,000 bale cut in exports, the USDA also raised its carryout projection by 400,000 bales to 4.8 million.
Export Sales Show Mixed Results
In the weekly Export Sales report, a total of 137,382 RB of upland cotton for 2024/25 was recorded, reflecting a 6.61% increase from the previous week. Turkey was the largest importer, purchasing 62,000 RB, followed by Pakistan with 25,500 RB. Export shipments reached 191,672 RB, a marketing year high, with Vietnam receiving 45,400 RB and China 43,800 RB.
Market Prices Adjust
On January 9, the Seam reported 9,935 bales of online sales at an average price of 64.75 cents per pound. ICE cotton stocks remained unchanged at 20,113 bales of certified stocks as of Thursday. The Cotlook A Index fell by 25 points on January 9 to 78.70 cents per pound, while the USDA’s Adjusted World Price (AWP) decreased by 37 points to 54.66 cents per pound.
Closing Prices for Cotton Contracts
Mar 25 Cotton closed at 67.01, down 149 points.
May 25 Cotton closed at 68.26, down 142 points.
Jul 25 Cotton closed at 69.37, down 138 points.
On the date of publication, Austin Schroeder did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please see the Barchart Disclosure Policy here.
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