Market Downturn: Cotton Futures Experience Losses Amid Mixed Economic Signals

Cotton futures faced nearby losses of 40 to 41 points on Friday, with March contracts dropping 25 points over a turbulent week. Outside market influences were mixed; crude oil futures increased by $0.43 per barrel while the US dollar index rose by $0.428, adding pressure to commodity prices.

Traders Increase Short Positions in Cotton

According to the Commitment of Traders report from the CFTC, speculators expanded their record net short position in cotton futures and options by 8,833 contracts as of Tuesday. By February 4, the net short position reached 62,407 contracts, indicating a continued bearish outlook among traders.

Export Sales Decline Compared to Last Year

USDA export sales data revealed that cotton marketing year sales stood at 8.886 million running bales (RB), marking a 12% decrease from the same period last year. This figure represents 86% of the USDA’s estimated export total, falling short of the average sales pace of 88%.

Online Bales Sold and Market Pricing Update

The Seam reported 5,001 bales in online sales on February 6, averaging a price of 61.12 cents per pound. Meanwhile, ICE cotton stocks remained steady on Thursday, holding at 218 bales of certified stocks. The Cotlook A Index decreased by 85 points on February 6, settling at 77.20 cents per pound. Concurrently, the USDA Adjusted World Price (AWP) dropped by 84 points on Thursday, landing at 53.18 cents per pound.

Cotton Futures Close on a Low Note

Mar 25 Cotton closed at 65.63, down 40 points.

May 25 Cotton closed at 66.82, down 40 points.

Jul 25 Cotton closed at 67.96, down 41 points.

On the date of publication, Austin Schroeder did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data provided is solely for informational purposes. For more details, please see the Barchart Disclosure Policy
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