Cotton Prices Decline as Export Sales Hit Seven-Week Low

Cotton prices experienced a decline on Friday morning, falling between 33 to 83 points. The market could not maintain earlier gains from Thursday, largely due to pressure from the rising dollar index. Futures settled with front month losses ranging from 17 to 27 points. Mixed external market activities contributed to this downward trend. Notably, crude oil futures increased by $1.51 per barrel, while the US dollar index rose by 0.881 on the day.

Export Sales and Commitments

The Export Sales report indicated a total of 166,875 running bales (RB) of cotton booked for the week ending February 20, marking a seven-week low. This figure represented a significant decrease of 46.59% from the previous week but remains well above the same week last year. Meanwhile, export shipments totaled 267,538 RB. Although this was a decline from the recent yearly high, it stands as the second-largest total recorded this year. Total commitments for export sales have reached 9.61 million RB, reflecting an 8% reduction from the previous year and accounting for 93% of the USDA’s export projections, which aligns with normal trends.

Market Activity and Commodity Prices

According to data from The Seam, 122 bales were sold online on February 26, at an average price of 56.56 cents per pound. The Cotlook A Index also lowered by 50 points on February 26 to 78.00 cents per pound. Additionally, ICE cotton stocks increased by 10,921 bales due to new certified bales, bringing the current level to 12,653 bales in certified stocks. On Thursday afternoon, the USDA reduced their Adjusted World Price (AWP) by 78 points to 53.89 cents per pound.

Current Cotton Futures Prices

As of the latest reports:

• March 25 Cotton closed at 65.2, down 17 points and currently down 83 points.
• May 25 Cotton closed at 66.6, with a loss of 27 points, currently down 80 points.
• July 25 Cotton closed at 67.68, down 19 points and currently down 34 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.