Cotton Futures Hit Limits Amid Trade Tariffs and Market Shifts

Cotton futures experienced a significant drop, trading at the 3-cent limit on Thursday for front-month contracts, while other contracts decreased by 260 to 288 points. Additionally, crude oil futures fell by $5.02 per barrel by midday, coinciding with a drop of $1.786 in the US dollar index today.

Impact of New Tariffs

On Wednesday, President Trump announced a new set of reciprocal tariffs, impacting various countries. The tariffs are set at 29% for Pakistan, 46% for Vietnam, and 34% for China (which rises to 54% when including taxes from earlier this year). Turkey will face baseline tariffs of 10%. These changes will take effect on April 9, with baselines starting from April 5.

Export Sales and Cotton Data

From the Export Sales report, a total of 129,102 running bales (RB) were sold in the week ending March 27, marking a three-week high. Vietnam led the purchases with 88,600 RB, followed by Pakistan with 21,000 RB. Conversely, China recorded net reductions of 21,300 metric running bales (MRBT). Total shipments reached 93,838 RB, slightly exceeding the previous week. Major destinations included Vietnam with 120,000 RB, Turkey with 76,700 RB, and Pakistan with 63,600 RB.

In February, cotton exports (excluding linters) amounted to 1.395 million bales, showing a decline of 9.1% compared to the previous year, but a notable increase of 34.46% from January.

Current Market Averages

The Seam reported 4,072 bales in online sales on Wednesday, with an average price of 65.41 cents per pound. The Cotlook A Index increased by 125 points on April 1, reaching 80.10 cents per pound. As of April 1, ICE cotton stocks remained steady, with certified stocks totaling 14,488 bales. The USDA’s Adjusted World Price (AWP) decreased by 97 points last Thursday to 53.66 cents per pound, with an update expected later today.

Current Cotton Prices

May 25 Cotton is priced at 64.8 cents, a decrease of 300 points.

Jul 25 Cotton is at 65.71 cents, down 300 points.

Dec 25 Cotton is currently at 67.67 cents, with a decline of 272 points.

On the date of publication, Austin Schroeder did not hold any positions, directly or indirectly, in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more details, please view the Barchart Disclosure Policy here.

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