HomeMost Popular Trouble in Cotton Futures Market ...

Trouble in Cotton Futures Market Trouble in Cotton Futures Market

Actionable Trade Ideas

always free

Markets React to Triple Digit Pullback

After the three-day weekend, cotton futures saw a dramatic triple-digit drop to kick off the week. March futures experienced a decline of 268 points, with December cotton ending the session 110 points in the red and 821 points under the March.

Investors were taken aback by the significant pullback, as futures cooled off after the holiday break. This unexpected turn in the market has left many speculating about the future of cotton prices.

Global Impact on Cotton Prices

International factors have further complicated the situation. Zhengzhou Cotton Prices were 220 to 255 yuan/MT higher post the Lunar New Year break for Monday. This net new buying translates to a gain of approximately 1.6 cents to around $1.02/lb, causing ripples throughout the global cotton market.

Analysis of Recent Market Data

The Cotlook A Index, a key indicator for cotton prices, was recorded at 101.6 cents/lb on 2/19, showing a notable decrease of 75 points. The latest USDA’s weekly Cotton Market Review revealed that 26,614 bales were sold during the week, averaging 88.52 cents/lb. Additionally, the updated AWP was listed at 73.44, marking another 340 points increase for the week. These numbers reflect the tumultuous nature of the cotton market in recent times.

Furthermore, the ICE certified stocks remained static at 999 bales for 2/15. This lack of movement in stocks suggests a deepening stagnation in the cotton market, adding to the concerns of investors.

The Aftermath

Mar 24 Cotton closed at 91.19, indicating a significant 268-point decrease. May 24 Cotton and Jul 24 Cotton also closed notably lower, down 273 and 289 points respectively. This collectively depicts a rather tumultuous and disconcerting scenario, leaving cotton investors and traders in a state of concern and uncertainty.

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.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.