Cotton Futures Tumble Despite Modest Hopes
Although cotton futures showed some initial promise, they ultimately plummeted by 69 to 94 cents, primarily dragged down by the new crop futures. The conclusion of the week saw Dec with a net loss of 134 points, while May suffered a substantial net loss of 513 points, plummeting by 17.15 cents from its contract high in February.
Speculative cotton traders found themselves 3.9k contracts less net long for the week, as a wave of long liquidation swept across the market. According to the CoT report, the group held 80.6k contracts net long at the settle. On the other end, commercial cotton traders were busy adding new hedges. However, the shorts managed to offset the new longs, resulting in a 4k contract swing to 127.6k contracts net short as of 4/2.
Market Data Reflects Industry Struggles
The USDA’s weekly cotton market review indicated the sale of 4.7k bales during the week, with an average price of 83.09 cents/lb. Meanwhile, the Cotlook A Index dipped by 235 points to 95.60 cents/lb on 3/28. The AWP witnessed further weakening by 140 points to 69.48. ICE certified stocks also rose by 14k bales to 81,664 bales on 4/1.
May 24 Cotton closed at 86.25, down 89 points. Jul 24 Cotton closed at 87.82, down 75 points. Dec 24 Cotton closed at 82.65, down 87 points.
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 is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The expressed views and opinions in this article do not necessarily reflect those of Nasdaq, Inc.
