HomeMost PopularOptimistic Momentum in Cotton Market Overflows into Holiday Weekend

Optimistic Momentum in Cotton Market Overflows into Holiday Weekend

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Bumper Crops and High Spirits

The cotton market surged with May futures dancing within a relatively narrow range of -26 to +120 points, ultimately closing with a 61-point gain. Despite a net loss of 15 points for the week, March bid adieu with an overall dip of 8.2 cents per pound after achieving new pinnacle in February. The open interest peaked around 130k contracts during the February peak but subsided to approximately 110k contracts. The December cotton open interest, on the other hand, steadily increased to nearly 80.6k contracts. December cotton soared by 65 points on Thursday, culminating the week with a net 4 point increase and the month with a 18-point upswing.

Export Excitement and Future Fortunes

The Foreign Agricultural Service (FAS) data revealed a buoyant cotton market with bookings hitting 98.2k RBs for the week ending 3/21, marking an 8% rise from the previous week and a 46% surge over the 4-week average. Cotton exports soared to 360,721 RBs, reaching a season total of 6.724 million, a 2.5% uptick from the previous year. Despite this growth, unshipped sales are trailing by 5.7%. New crop sales reached 1.063 million RBs, lagging behind last year’s record with a 22% gap.

Planting Potential and Index Inclination

According to the NASS surveys, a vast expanse of 10.673 million acres are earmarked for cotton cultivation this season, indicating a substantial 443k acre increase from the preceding year and just shy of the 11.3 million anticipated. Predictions preceding the official report foresaw a year-on-year increase in acreage, yet the March figure lingered near the lower spectrum of estimates. The Cotlook A Index clocked in at 96.90 cents/lb, marking a 45-point ascent, while the Adjusted World Price of cotton, as determined by USDA’s FSA, dropped by 162 points to 70.88 cents/lb. ICE certified stocks stood at 52,224 bales as of 3/27.

Bright Outlooks and Closing Notes

The closing numbers painted a bright picture, with May 24 Cotton wrapping up at 91.38, a noteworthy 61-point leap, Jul 24 Cotton closing at 91.97 with a 53-point surge, and Dec 24 Cotton ending at 83.99, propelled by a solid 65-point surge.

On the date of publication, Alan Brugler had no direct or indirect stakes in any of the securities mentioned in this article. The information provided is solely for informational purposes. For more details, refer to the Barchart Disclosure Policy.

The opinions and viewpoints expressed in this article solely belong to the author and may not necessarily align with those of Nasdaq, Inc.

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