Mumbai, 12 Apr (Commoditiescontrol): ICE cotton futures ended lower on Thursday, pressured by a surge in the U.S. dollar and lower weekly export sales data, offsetting a slightly positive supply and demand estimates report.
The dollar index rose about 0.2% jumping to its highest since mid-November against its rivals, making the natural fibre more expensive for overseas buyers.
However, putting a floor under prices, global oil benchmark Brent prices stayed high as supplies faced fresh threats from escalating conflict in the Middle East. Higher oil prices make cotton-substitute polyester more expensive.
ICE Cotton contracts for May closed at 83.37 cents, 194 points lower. Jul settled at 85.28 cents, losing 182 points. Dec ended 74 point weak at 80.69 cents. May cotton continues to slide lower as traders exited their position before USDA reports and Friday’s May options expiration. Certified cotton stocks, which can be delivered against the contract, were at 93,324 bales compared with 67,576 bales on April 1, according to ICE data.
The cotton market saw losses of 40 to 194 points. The outside markets provided some pressure.
The weekly Export Sales release from FAS showed 81,500 RB of old crop upland cotton sales in the week ending on April 4, a 5-week low. New crop was improved from last week, but still at just 35,661 RB. Actual shipments in that week were 274,147 RB, a 9-week low.
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 Cotlook A Index was back down 50 points to 92.15 cents/lb on April 10. The AWP weakened by another 140 points to 69.48 last Thursday and will be updated later today.
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 Friday, support for the Jul Cotton contract is at 84.48 cents and 83.71 cents, with resistance at 86.66 cents and 88.07 cents.
(By Commoditiescontrol Bureau: 09820130172)
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