Cotton Prices Experience Minor Gains Amid Trade Developments

Cotton futures climbed back from an early session high, closing on Monday with gains ranging from 2 to 18 points. In related markets, crude oil prices rose by $1.10 per barrel, while the US dollar index increased by $1.462 to reach 101.630.

Cotton Planting Progress Behind Average

Recent Crop Progress data indicates that 28% of the US cotton crop has been planted as of May 11. This figure is behind the average planting pace of 31%.

Trade Tariff Reductions Announced

A meeting between US and Chinese trade representatives delivered notable progress, resulting in a 115% reduction in tariffs between the two nations for a duration of 90 days. The US has reduced its tariff on Chinese goods to 30%, while China has lowered its tariff to 10%.

USDA Cotton Ginnings Report Highlights

According to the USDA’s annual Cotton Ginnings report, 14.075 million running bales (RB) have been ginned, with total 2024 production projected at 14.383 million bales, including pima. The World Agricultural Outlook Board’s old crop balance sheet has raised the export figure by 200,000 bales, leading to a carryout reduction to 4.8 million bales. New crop stocks are estimated at 5.2 million bales.

Recent Auction Results and Market Indicators

In the latest online auction from The Seam, sales reached 1,255 bales with an average price of 71.50 cents per pound. The Cotlook A Index dropped by 70 points on Friday, closing at 78.25. Additionally, ICE cotton stocks increased by 5,529 bales as of May 9, reaching a certified stock level of 22,250 bales. Furthermore, USDA’s Adjusted World Price (AWP) fell by 13 points last Thursday, landing at 54.81 cents per pound.

Cotton Futures Closing Prices

Jul 25 Cotton closed at 66.63, up 2 points.

Oct 25 Cotton closed at 68.89, up 9 points.

Dec 25 Cotton closed at 68.85, up 18 points.

On the date of publication, Austin Schroeder 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. For more information, please view the Barchart Disclosure Policy here.

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