Positive Momentum for Cotton Futures
The cotton market got off to a strong start this Monday, with cotton trading at higher levels compared to the previous day. Despite a slight pullback from overnight highs, both old crop and new crop cotton futures showed healthy gains. May cotton futures maintained a relatively tight range throughout the day, closing with a significant 61-point increase. The lead month’s performance last week resulted in a minor 15-point loss, but the month of March concluded with an overall 8.2 cents/lb dip after reaching new highs in February.
Market Sentiment and Speculative Positioning
Speculative positioning in cotton futures and options, as revealed by Commitment of Traders data, indicated a net long position held by spec funds at approximately 84,468 contracts by March 26. This represented a reduction of 5,054 contracts compared to the previous week. Such movements in speculative positions can often influence market sentiment and price dynamics.
Export Data and Planting Intentions
Recent Foreign Agricultural Service (FAS) data highlighted an increase in cotton bookings, reaching 98.2k RBs for the week that ended on 3/21. This marked an 8% rise from the previous week and was notably 46% higher than the 4-week average. Despite a positive uptick in exports, new crop sales still lagged behind last year’s pace by 22%. Additionally, surveys conducted by the National Agricultural Statistics Service (NASS) suggested an intention to plant 10.673 million acres of cotton this season, reflecting a 443k acre boost from the previous year.
Market Review and Price Trends
Weekly reviews from the USDA’s Cotton Market showcased steady sales, with an average price of 85.19 cents/lb recorded for the week. Furthermore, the Cotlook A Index rose by 45 points to settle at 96.90 cents/lb on 3/26. The USDA’s Farm Service Agency (FSA) adjusted the World Price of cotton to 70.88 cents/lb, signaling potential market shifts. ICE certified stocks stood at 52,224 bales as of 3/27, indicating ongoing market activity and demand.
Current Futures Performance
Looking at current figures, May 24 Cotton closed at 91.38, up 61 points, showing a positive trajectory. Similarly, Jul 24 Cotton closed at 91.97, up 53 points, demonstrating encouraging movement in the market. Dec 24 Cotton closed at 83.99, up 65 points, illustrating resilience and potential growth in future trades.
On the publication date, Alan Brugler did not hold any positions related to the securities mentioned. The information provided in this article is for informational purposes only.
The author’s views and opinions expressed herein are personal and may not align with those of Nasdaq, Inc.
