Cotton Futures Decline Amid External Market Pressures

Cotton futures closed the Friday session with the front-month contracts dropping between 129 to 135 points. For the week, May futures fell 209 points, reflecting a decline of 3.1%. The performance of outside markets contributed to this drop. Crude oil futures showed a decrease of 40 cents per barrel while the US dollar index rose by $0.329 for the day.

Speculative Trading and Market Commitments

As of February 25, managed money speculators increased their net short positions by an additional 11,067 contracts, bringing their total to a record net short of 68,453 contracts.

Export Sales and Shipment Data

According to recent export sales data, total commitments have reached 9.61 million running bales (RB). This figure represents an 8% decline from the previous year, covering 93% of the U.S. Department of Agriculture’s (USDA) export projection and aligning with historical trends. Actual shipments total 4.508 million RB, down 16% year-on-year, equating to only 44% of the USDA’s target, which is notably lower than the 46% average seen in prior years.

Market Statistics and Inventory Updates

On February 27, The Seam reported 4,795 bales in online sales, with an average price of 59.13 cents per pound. Moreover, the Cotlook A Index declined by another 50 points that same day, settling at 77.50 cents per pound. ICE cotton stocks remained stable, with the certified stocks at 12,653 bales. Additionally, the USDA adjusted their Adjusted World Price (AWP), reducing it by 78 points to 53.89 cents per pound.

Cotton Futures Closing Prices

March 25 Cotton closed at 63.88, down 132 points.

May 25 Cotton closed at 65.25, down 135 points.

July 25 Cotton closed at 66.39, down 129 points.

On the date of publication, Austin Schroeder did not hold any positions, either directly or indirectly, in the securities mentioned in this article. All data and information in this article are intended solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

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