Cotton Prices Decline Amidst USDA Acreage Report and Market Moves

Cotton prices are showing weakness at midday on Monday, following the USDA’s confirmation of reduced cotton acreage. Futures have decreased by 46 to 62 points due to some market participants reacting to the news. In contrast, crude oil futures have risen by $2.18 per barrel, with the US dollar index up by $0.261 today.

USDA’s Acreage Estimates

The USDA’s Prospective Planting report indicated a total of 9.867 million cotton acres expected to be planted this spring. This figure is slightly below the average trade estimate and represents a decline of 1.315 million acres from last year’s levels if it materializes.

Market Positioning and Trends

According to Friday’s CFTC Commitment of Traders report, managed money has added 4,193 contracts to their net short position in cotton futures and options as of March 25. As of Tuesday, they were holding a net short of 73,810 contracts.

Sales and Price Data

On March 28, The Seam reported 2,234 bales in online sales, with an average price of 60.52 cents per pound. The Cotlook A Index increased by 125 points on Friday, reaching 79.15 cents per pound. ICE cotton stocks remained unchanged as of March 28, with certified stocks at 14,488 bales. Additionally, the USDA’s Adjusted World Price (AWP) dropped by 97 points Thursday afternoon report, bringing it to 53.66 cents per pound.

Current Cotton Futures Prices

May 25 Cotton: at 66.28, down 62 points.

July 25 Cotton: at 67.57, down 53 points.

December 25 Cotton: at 69.63, down 46 points.

On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are 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.