Cotton Futures Decline as Managed Money Increases Short Positions

Cotton futures ended Friday with losses ranging from 18 to 24 points. However, nearby May futures still gained 163 points over the week. In contrast, crude oil futures dropped by 88 cents per barrel, coinciding with a $0.292 decrease in the US dollar index.

Trader Activity and Market Insights

The latest CFTC Commitment of Traders report revealed that managed money added 4,193 contracts to its net short position in cotton futures and options as of March 25. Consequently, their net short total reached 73,810 contracts by Tuesday.

Export Commitments and Planting Estimates

According to USDA Export Sales data, upland cotton commitments reached 10.309 million RB, reflecting a 5% decline from last year. This figure accounts for 100% of the USDA export forecast for 2024/25, slightly trailing the average of 101%.

Analysts surveyed by Bloomberg predict that next Monday’s Prospective Planting report will indicate approximately 9.9 million cotton acres. The predictions range from 8.8 million to 10.5 million acres.

Market Metrics and Prices

The Seam reported 9,181 bales sold online on March 27 with an average price of 60.15 cents per pound. Additionally, the Cotlook A Index increased by 50 points on Wednesday, reaching 77.90 cents per pound. ICE cotton stocks remained unchanged as of March 27, with 14,488 bales currently certified.

USDA’s Adjusted World Price (AWP) fell by 97 points on Thursday afternoon, settling at 53.66 cents per pound.

Closing Prices

May 25 Cotton closed at 66.89, down 18 points.

July 25 Cotton closed at 68.10, down 24 points.

December 25 Cotton closed at 70.06, down 23 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 contained herein are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.

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