Cotton Futures Resilient
Cotton futures are off to a strong start this week, with significant gains marking a bullish trend for the old crop. The May contract saw an overnight surge of 226 points, building on the positive momentum from the previous trading session. Nearby cotton futures closed out Friday with gains ranging from 24 to 46 points. While May futures experienced a net loss of 134 points over the week, the market remains buoyant as December cotton concluded with a net gain of 69 points, strategically eyeing acres for 2024 planting.
Market Sentiment and Trading Activity
The latest data from the Commodity Futures Trading Commission (CFTC) revealed a shift in sentiment among cotton traders, with long positions being liquidated during the reporting week ending 3/12. This led to a decrease of 3.2k contracts in net long positions, bringing the total to 93,160 contracts. Commercial cotton hedgers, on the other hand, reduced their net short positions by 1,517 contracts to reach 132,529. This adjustment reflects evolving market dynamics and investor behavior.
Industry Insights
Insights from the USDA’s weekly Cotton Market Review indicate that 11,320 bales were sold at an average price of 89.25 cents per pound. Additionally, the Cotlook A Index registered a slight decline of 40 points on 3/14, settling at 99.80 cents per pound. The Adjusted World Price (AWP) also experienced a decrease, standing at 76.10 cents per pound after a 68-point drop from the previous week. Furthermore, ICE certified stocks increased by 1,100 bales, reaching a total of 27,765 as of 3/13.
Current Cotton Futures Standings
May 24 Cotton closed at 93.94, up 46 points, currently up 114 points
Jul 24 Cotton closed at 93.59, up 33 points, currently up 113 points
Dec 24 Cotton closed at 83.68, up 25 points, currently up 14 points
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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