Cotton Futures Plummet

The midweek session saw nearby cotton futures plummeting by 10 to 183 points, with the most significant drop occurring in the old crop. December prices remained in a tight range of 80 points throughout the session.

Market Insights & Predictions

The USDA’s Agricultural Attache has made some notable adjustments to Brazil’s cotton production figures, increasing it by 340k bales to 14.9 million. However, they reduced the carryout by 200k to 11 million, resulting in significantly raised ending stocks of 6.2 million bales. Looking ahead to the 2024/2025 cotton outlook, the initial forecast suggests an increase in area to 1.87 million hectares and production to 15.35 million bales.

Weather Update

According to the NOAA’s latest 7-day Quantitative Precipitation Forecast (QPF), areas in East Texas and North Louisiana can expect rainfall of up to 1 3/4 inches. Additionally, regions in Northern Mississippi, Georgia, and Alabama may receive up to an inch of rain over the week.

Market Index Movements

The Cotlook A Index experienced a significant decline of 235 points, bringing it to 95.60 cents per pound on 3/28. The Adjusted World Price (AWP) also weakened by 162 points to 70.88 cents per pound. ICE certified stocks witnessed a 14,000 bale increase, totaling 81,664 bales as of 4/1.

May 24 cotton closed at 88.98, marking a 183-point drop. Meanwhile, July 24 cotton closed at 90.18, down by 153 points, and December 24 cotton concluded at 84.1, a decrease of 20 points.

Disclaimer

On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.