Cotton Market Faces Pressure as Futures Dip Amid Outside Forces

Weekly Data and Market Trends Highlight Challenges

Cotton futures experienced losses ranging from 84 to 103 points on Friday, largely influenced by external market pressures. Over the week, March futures decreased by 182 points, while December cotton futures are set to expire today. The US dollar rose by 249 points, contributing to the downward trend, alongside crude oil prices, which fell by $1.13 per barrel.

Shifts in Trading Position Indicate Market Sentiment

According to the latest Weekly Commitment of Traders data, managed money cut their net short position in cotton futures and options by 3,618 contracts, bringing their total net short position to 16,383 contracts as of December 3.

Export Sales Data Reveals Underperformance

Export Sales data for the 2024/25 marketing year reported upland cotton shipments totaling 2.145 million running bales (RB). This figure reflects a significant 13% decline from last year, representing only 20% of the USDA’s full-year export forecast. Commitments, which include both shipped and unshipped sales, reached 6.859 million RB, marking a 13% decrease from the previous year. This total accounts for 65% of the USDA’s target, trailing behind the typical export sales pace of 71%.

Market Reports Reveal Current Trends

The Seam reported 7,693 bales in online sales on December 5, with an average price of 68.01 cents per pound. Additionally, ICE cotton stocks rose by 1,189 bales on Thursday, totaling 14,463 bales of certified stocks. The Cotlook A Index remained steady on December 5, with a value of 81.60 cents per pound. Meanwhile, the USDA Adjusted World Price (AWP) saw an increase of 21 points last week, reaching 57.74 cents per pound.

Market Prices Overview

The closing prices for cotton futures on December 5 are as follows:

• Mar 25 Cotton closed at 70.11, down 99 points, currently up 54 points
• May 25 Cotton closed at 71.35, down 103 points, currently up 42 points
• Jul 25 Cotton closed at 72.41, down 93 points, currently up 40 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.