Mumbai, 16 Apr (Commoditiescontrol): ICE cotton futures rebounded on Monday, helped by speculative buying after prices touched a near three-month low in the previous session, while a strong U.S. dollar capped the natural fiber's gains. The dollar index rose about 0.2%, making cotton more expensive for overseas buyers. On Friday, cotton prices hit their lowest since Jan. 18.
Limiting gains, oil prices drifted lower, with the market downplaying the risk of a broader regional conflagration after Iran's weekend attack on Israel. Lower oil prices make polyester - a cotton substitute - less expensive
ICE Cotton contracts for May closed at 82.93 cents, 31 points higher. Jul settled at 85.15 cents, adding 56 points. Dec ended 46 point strong at 80.57 cents. Cotton futures saw some strength with futures up 16 to 62 points. Crude oil closed with just a 3 cent gain, as Israel signaled possible retaliation over the weekend’s strike from Iran. The US dollar index was up 168 points.
The Cotton On-Call report from CFTC showed unfixed call sales at 10,572 contracts for May as of 4/5, a 4,198 drop from the week previous. For July, unfixed call sales are 22,995 contracts, with the total at 68,015 contracts.
Cotton planting across the US has now been reported at 8% complete according to NASS, even with the average pace in the last 5 years. That was also 1% ahead of last year.
The U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 81,500 running bales for 2023/2024, down 4% from the previous week, and 10% from the prior 4-week average.
According to the World Agricultural Supply and Demand Estimates (WASDE) report on Thursday, world trade for 2023/24 was projected 700,000 bales higher this month to nearly 44 million.
USDA left the US cotton balance sheet alone this month, as they wait for final production data next month. Stocks are still at 2.5 million bales, though the US average farm price was trimmed by a penny to 76 cents. The World cotton S&D table was a 0.26 million bale cut to stocks at 83.08 million bales, mainly on tighter carryover from the previous crop year.
World trade for 2023/24 was projected 700,000 bales higher this month to nearly 44 million, as a 1.3-million-bale increase in China's imports was partially offset by reductions for Pakistan and Indonesia, as per the report.
Global ending stocks for 2023/24 were projected down nearly 300,000 bales in April as lower stocks across West Africa, Australia and Brazil more than offset higher supplies in China, the report added.
The Seam reported 2,200 bales sold last Friday, at an average rice of 85.25 cents/lb. The Cotlook A Index was down another 180 points to 89.60 cents/lb on April 12. The AWP dropped another 405 points to 65.43 last Thursday and is good through next week.
Cotton spec traders were shown 3,900 contracts less net long for the week after a bout of long liquidation. The CoT report had the group 80,600 contracts net long as of the settle. Commercial cotton traders were adding new hedges, though the shorts offset the new longs for a 4,000 contract swing to 127,600 contracts net short as of April 2.
For Tuesday, support for the Jul Cotton contract is at 84.32 cents and 83.49 cents, with resistance at 86.09 cents and 87.03 cents.
(By Commoditiescontrol Bureau: 09820130172)
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