Cotton prices experienced a drop of 85 to 160 points on Monday morning, following a closing decline on Friday where contracts saw a decrease of 5 to 45 points. This shift is attributed to the USDA’s production cut, which did not sufficiently counterbalance a reduction in export forecasts. Additionally, crude oil prices fell by 35 cents per barrel, and the US dollar index decreased by 53 points.
As of October 1, NASS’s bi-monthly Cotton Ginnings report confirmed a total of 1.146 million RB of cotton ginned, marking an increase of 473,933 RB from mid-September and the highest figures recorded for this period since 2019. The recent monthly Crop Production report revealed a reduction in yield by 18 lbs/acre to 789 lbs, mainly due to a 176 lb/ac decrease in Georgia. Consequently, production was lowered by 310,000 bales to 14.2 million, with US ending stocks for 2024/25 revised higher to 4.1 million bales.
On the international front, the cotton stocks projection for 2024/25 declined by 160,000 bales to 76.33 million bales. Also, spec funds reduced their net short position in cotton futures and options by 224 contracts, totaling a net short of 11,923 contracts as of October 8.
