Export Demand Resilience
The cotton market witnessed a triple-digit decline despite robust export demand as reported on Thursday. Old crop cotton plummeted by triple digits, while new crop trading saw a 40 to 55 point decrease. Interestingly, futures briefly surged by 30 points at the session’s peak.
Steady Growth
Census data released highlighted an upward trend in Feb cotton shipments, totaling 1.54 million bales. This represented a substantial 30% increase from January and a noteworthy 12% surge compared to Feb ’23. The cumulative program hit 6.46 million bales by February, surpassing the previous year’s 6.34 million.
Mixed Sales Performance
The USDA disclosed the sale of 85k RBs of cotton in the week ending 3/28. While this figure marked a 14% decline week-over-week, it boasted a 4% rise from the 4-week average. Additionally, FAS data revealed new crop bookings totaling 23k RBs, with prominent sales to Honduras.
Global Insights
The USDA’s Ag Attache revised Brazil’s cotton production figures, increasing it by 340k bales to 14.9 million. However, a subsequent 200k cut in carryout resulted in an upward revision of ending stocks to 6.2 million bales. Looking ahead to 24/25, the initial forecast for cotton indicates an expansion in area to 1.87m HA and a rise in production to 15.35 million.
Market Indicators
The Cotlook A Index experienced a considerable 235-point decrease on 3/28, settling at 95.60 cents/lb. Moreover, the AWP weakened by 162 points to 70.88 cents/lb. ICE certified stocks saw a modest uptick, rising by 14k bales to reach 81,664 bales on 4/1.
Current Figures
As of now, the market reflects the following stats:
May 24 Cotton at 87.18, down by 180 points
Jul 24 Cotton at 88.65, marking a decline of 153 points
Dec 24 Cotton at 83.51, slipping by 59 points
Alan Brugler asserts no positions in the mentioned securities. The information provided is for informational purposes only. Please refer to the Barchart Disclosure Policy for more details.
Opinions expressed within belong to the author and do not necessarily mirror those of Nasdaq, Inc.
