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ICE cotton futures gain tracking broader markets

23 Apr 2024 8:42 am
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Mumbai, 23 Apr (Commoditiescontrol): ICE cotton futures ended higher on Monday, adding almost 1%, as support from upbeat sentiment in oil, grains, and financial markets overshadowed pressure from a strong dollar. Persisting dryness in parts of the U.S. Plain is also seen supporting prices of natural fiber.

ICE Cotton contracts for May closed at 80.04 cents, 135 points higher. Jul settled at 82.42 cents, adding 140 points. Dec ended 94 point strong at 78.49 cents.

The cotton market saw some recovery from the drop off the February highs, as contracts were up 29 to 140 points on Monday.

Last week, cotton complex witnessed continuation of the death spiral liquidation for May as longs get out before deliveries, with rest of the contracts following along. As a result, the contract concluded the week 4.8% lower.

Cotton on-Call report showed 6,900 contracts of unfixed call sales for May, down 3,672 on the week. July was up 5,426 contracts to 28,421 contracts. Overall, on the week unfixed call sales were up 2,828 contracts to 70,843 contracts. The unfixed call purchases are large for December at 40,708 contracts.

On planting front, the US cotton crop is now 11% planted as of April 21 according to the NASS Crop Progress report from this afternoon. That matches both the 5-year average and last year’s pace.

Elsewhere, the U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 146,100 running bales for 2023/2024, up 79% from the previous week and 64% from the prior four-week average. The report also showed exports of 266,700 running bales, down 3% from the previous week and 24% from the prior four-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.

ICE certified cotton stocks were up another 527 bales on April 19 at 176,610 bales. The Cotlook A Index was down another 80 points to 86.55 cents/lb on April 19. The AWP dropped another 325 points to 62.18 yesterday and is good through this Thursday.

Commitment of Traders data confirmed a mass exodus of the managed money long in cotton futures in options in the week that ended on April 16, of 25,890 contracts. That was the largest bear move in a one-week Tuesday/Tuesday move since CFTC started the data series back in 2006 taking the net long down to just 36,142 contracts.

For Tuesday, support for the Jul Cotton contract is at 81.46 cents and 80.50 cents, with resistance at 82.98 cents and 83.54 cents.

(By Commoditiescontrol Bureau: 09820130172)


       
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